How to Negotiate Low Mortgage Interest Rates
Negotiating low mortgage interest rates can be done by refinancing with your existing lender, as they will work to keep your business. Get tips on lowering an interest rate with advice from an experienced mortgage broker in this free video on personal finance.
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Hi, my name is Matt McKillen, I'm with Innovative Financial Group. The question posed to me today was how to negotiate low mortgage rates. Generally if you currently own a home, probably one of the first places you want to look to refinance is with your existing lender. Let's face it, you've been a customer of theirs maybe for years, the thought of losing your business to a competitor generally will make a bank really bend over in trying to keep you in with them on a very low rate versus losing your business. Another way to kind of work a better rate with banks is you have the option of either paying points to buy down your rate or not buy your rate down, for example if you're taking 100,000 dollar loan, if you do what's called a zero points rate, which is very popular, it reduces your closing costs, your rate might be a quarter of a point to three eighths higher than someone who knows they're going to be in the home for a long term and is willing to maybe pay a one percent fee to buy their rate down to the lowest possible. To give you an example, I had a client I gave a quote to just yesterday where the different in the rate was almost a half a percent if they were to pay a point basically to buy their rate down. So one way to negotiate a really good rate if you're going to be in the property for at least let's say 5 to 7 years is to pay a discount point or go back to your existing lender and let them know that you're looking to lower your rate and give them the first shot at earning your business. Thanks again for asking the question, my name is Matt McKillen with Innovative Financial Group.