Knowledge Is Power
Before speaking with a specific lending institution such as your bank or credit union, always find the lowest mortgage rates online. Get a list of the best rates for every possible type of mortgage you’re considering, including fixed vs. variable rates, different loan terms, and different amortization periods.
This will not only give you a better sense of what the options are, but it will also help you when you start negotiating.
Your Bank Doesn’t Care About You
Never assume that a long history with your bank will get you preferential treatment. While credit unions and smaller lending institutions have greater flexibility when it comes to loans, most of the bigger banks are locked into their computer algorithms that make it difficult for them to negotiate one-on-one.
This doesn’t mean you can’t do it, just that you’ll need a very good reason for them to listen.
That’s where sites like http://mortgagerates.ca/ come into play.
Check Mortgage Terms And Conditions
Your mortgage isn’t just a payment schedule and an interest rate. There are also options such as pre-payment options, (lump-sum or monthly), the ability to raise or lower your monthly payments, skip-a-payment plans, etc.
Even a 5 year term is a long time in terms of your financial forecast, and anything from a job-loss to a medical expense to a sudden need to move could make some of these options very important to you.
Decide what options you need and which you’d like to have.
Negotiate From A Position Of Power
If you have a bank or specific institution that you would prefer to get your mortgage from, go speak to a mortgage representative there. Check online first to find out what their default rates and terms are and compare them with what you’ve found online.
Remember the golden rule about negotiating: If you’re not prepared to walk away, don’t let them call your bluff. If you know going in that you’re only going to get a mortgage from your bank, it’s pretty tough to play hard-ball and convince them you have other options.
At the same time, don’t be a jerk about it. You want to show your representative that you really do want them to work with you to find an option you can all be happy with.
You have to state your case clearly and show them that you have better options. Some of the lists you found online will help with this.
Tell them which parts of their terms you’re happy with, and where you need them to move.
See what they say and don’t be afraid to leave and think about it.
If you’re not used to negotiating, don’t worry. Be polite and constructive, and remember that this negotiating is going to find a solution that’s beneficial for both of you.