If you’ve been shopping for a house, you’ve probably been bombarded with offers of no money down mortgage negotiation programs. You may have seen ads for “no money down” mortgage modifications, but what are they and how do they work? “no money down” mortgage modification allows you to refinance without paying cash upfront. “No money down” simply means that you pay nothing up front; the mortgage lender handles all of the details. Revenues and Profits Article on Negotiating a Mortgage will provide you valuable info on how this type of loan modification work
There are four basic elements in a mortgage negotiation: (5) your creditworthiness; (6) closing expenses; (7) points and fees; and (8) mortgage interest rates. Your creditworthiness is an important part of any mortgage negotiation because it determines how much money you’ll need to borrow. The higher your credit score, the more likely you will be able to qualify for a good interest rate and affordable terms. Having low or poor credit can also result in higher payments and higher interest rates. If you know what your credit report says now, you’ll have information in hand to negotiate from a stronger position.
Closing expenses and points add up quickly. If you can’t afford your closing costs, you won’t be able to afford your mortgage rate. Remember that lenders want their money, even if they have to give it away. So before you agree to a mortgage modification, ask your lenders about their prepayment penalties and/or any other fees you’ll need to pay upfront before receiving your mortgage. This will help you save money later on.
On top of financing down your mortgage, you can save money on interest rates as well. Mortgage interest rates are set every 30 days based on the Bank of America’s schedule. Most mortgage negotiation companies will have interest rate quotes that you can use to your advantage. Comparing them will allow you to save money.
Another thing you can do to save money is work with a mortgage broker. Instead of going directly to a lender, a mortgage broker works on your behalf by negotiating for you. A mortgage broker has a lot of connections, so he can get you better terms and interest rates than you could get on your own. A mortgage broker is worth his weight in gold, so make sure you work with one before you agree to pay him.
Some mortgage brokers will charge a fee for their services, but there are plenty of quality firms that don’t charge. For most lenders, it’s usually cheaper to hire mortgage brokers than it is to deal directly with individual homeowners. The best interest deals are found through mortgage brokers, so make sure you find one before you sign on the dotted line!
Another option for negotiating interest rates is to refinance your home. If you own your home outright, or if you’ve had your mortgage for a while, refinancing may be an option. Lenders want to see the possibility of a homeowner opting for bankruptcy when refinancing, so they’ll offer special rates. Be aware that refinancing may affect your credit score, which is why you need to get all of your financial information in order before you begin. A mortgage broker can help you do this.
The best advice for finding the right lender and getting the best deal is to shop around. Compare interest rates, programs offered, terms offered, and fees. You should also look for lenders who are willing to work with you, whether you need a mortgage broker or not. Good luck!
Remember, it never hurts to ask a lender whether they would consider offering you a no-obligation quote on a home mortgage refinance. Sometimes the term of the loan can be extended, resulting in an extension of the interest rate as well. Even if the interest rate may have decreased, a lender may be willing to bargain with you because refinancing is such a low risk. With so many homes up for sale in the current economy, this may be a great way to save money.
Most lenders understand that your financial future depends on finding the best possible borrowing terms for your new loan. It’s in their best interest to offer competitive rates, but they don’t have to base this decision solely on your personal circumstances. Instead of making interest rates the only deciding factor, lenders should consider other factors, such as location, neighborhood, income level, and credit history. A mortgage broker’s job is to look at all these factors and determine what type of loan is best for you. After all, you should be able to get the best possible borrowing terms.
In order to negotiate successfully, you will need to establish a good rapport with the lender. Once you find a few potential candidates, start by getting the basics down pat-make sure you know how to read your credit report properly, know what type of payments you can afford, and have a good understanding of your personal situation. If you approach your prospective lenders with a clear plan of how you intend to negotiate the terms of your refinance, chances are you’ll come away with some type of negotiation. The key is to make sure your plan is realistic.