Improve Your Negotiations With The 5 Golden Rules.   LEARN THEM

As 2009 quickly approaches, let me first wish you a very Happy New Year!

With mortgage interest rates recently nearing record lows, I, like many others, decided to refinance my home. After my mortgage broker locked in the best rate she could find and started the process, she contacted my current lender to confirm the payoff amount.

Interestingly, I then received a call from my current lender – now aware that I was refinancing with someone else – asking how they could keep my loan. Of course, this makes sense for them as it’s profitable. I told them they had to beat the rate my broker had found the previous week. The next day, they beat it.

Was I done? Time to ditch my broker and go with my current lender? No. I felt a responsibility to my broker because she had already spent time and money on our refinancing effort. Yet I was also extremely price sensitive and my current lender’s better rate would provide significant savings to me over the length of the loan.

So I called my broker and asked if she could match my current lender’s lower rate. I told her I would absolutely stick with her if she could match it. I also told her I would pick up her out-of-pocket costs she had already incurred for me if I didn’t close with her. Fortunately, she found another lender that matched the lower rate and our refinancing is proceeding at the lower rate.

Our lesson? Mortgage rates are negotiable and it pays to maximize your leverage by shopping around and getting potential lenders to compete. So if you’re considering refinancing, contact your current lender and give them the opportunity to make an offer. And if a serendipitous opportunity presents itself, take advantage of it!

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