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Can You Negotiate Mortgage Loan Interest Rate?

Posted By Jim On 06/13/2007 @ 11:16 am In The Home | 8 Comments

I recently received an email from Dustin, who blogs at Digmann.com [3], about whether or not an interest rate on a mortgage is actually negotiable.

I was recently pre-approved for a mortgage. I was wondering if you knew if the interest rate I was give is negotiable or if there are situations where it is. Since I will be paying so much to interest, I thought I would see how I could lower this rate since the variables which generated it are fixed.



Thanks. Keep up the good work.

My response was:

I don’t think the rate itself is negotiable with the lender that offers it because they generated it based on a variety of factors, some of which are your own credentials. You can lower it by paying points or maybe putting down a larger deposit, things like that, changing the characteristics of the loan.



What you can do is get quotes from other lenders because lender specific characteristics, how badly they want your class of loan (etc), could lead to quarter percent or eighth of a percent difference. Also, closing costs could be lower with someone else.

Since I’m neither a lender nor an expert, I don’t know how negotiable the interest rate is but if anyone else has any information they can shed, I’m sure it would be very much appreciated.


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