- 1). Conduct market research. Negotiate with lenders by providing competitor information. Check out comparison tools (see Resources) to find the best mortgage rates in the industry.
- 2). Negotiate with the existing lender on refinancing. The existing lender is motivated to retain business. It’s expensive to replace customers. Ask the existing lender to match the most competitive interest rate on the market before moving the mortgage to a different company.
- 3). Request a good faith estimate (GFE). A GFE includes itemized closing costs. According to Bank Rate, a lender is required to provide this statement within three days of approving a loan. Review the estimate to determine which fees should be negotiated. For example, fees the company doesn’t outsource are easy to negotiate. Ask the lender to waive application fees. If a lender charges both a processing and underwriting fee, ask the lender to waive one of these fees.
- 4). Double-check fees. A lender might agree to lower the interest rate but then increase closing cost fees to compensate. Review closing documents very carefully before signing. Make sure the interest rate and itemized fees are exactly the same as the Good Faith Estimate. If there are changes, ask the lender to correct it.
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