Monday, January 12, 2009

Mortgage refinance: Negotiation Pays Big!

Instant Niche Emails -
This is a fantastic list building tool. It is an incredibly simple way to create a year’s worth of emails for any niche market literally overnight! (also can also be used to create 52 blogging posts and more!)

I am at the end of my journey to refinance our house. The papers are signed. Just a few T's to cross and it is done.

We scored, IMO, with a 4.25% - 30 year fixed mortgage.

Here is why the rate is especially important to me.

Over the years I have been loathe to negotiate with the sellers of things I buy. Cars? I am a pushover. Water softeners? I overpaid about $300 for one years ago. The guy was such a good salesman. Appliances? I paid whatever the sticker said.

Now I am older. I am wiser. When I started to look for a mortgage last year I decided to play the numbers game rather than the "isn't she a great banker" game. I told my banker, Jessica, that I would be shopping around for rates. I wasn't trying to be mean, just truthy. Plus, I figured she would work harder for me knowing that I would not buy her mortgage just because.

Toward the end of the search process Jessica truly did have a good rate for me at 4.85% with one point (I would pay 1% of the total amount of the mortgage to get that rate). She also offered 5.35% with no points. That was two weeks ago.

But Jessica made a mistake that she could not forsee. I had all of the papers signed to bring into her office. She needed our homeowner policy declarations page so I stopped by my insurance man's office to get it. Lo and behold, his company, State Farm, offered mortgages at 4.5% that day. When I did the math quickly in my head I decided playing him against Jessice would make for a profitable day.

When I called Jessica I could tell by the tone of her voice that she was miffed. She was already counting her commission when I threw the monkey wrench into the issue. Bad me!

"Let me see what I can do," said Jessica. "Fine!" I said.

Pushing my luck, I called another mortgage company for their rate. Lo and behold! They made an offer of 4.25% with two points. More expensive, for sure, but sure worth considering.

I called Jessica back to tell her the bad news. This time she was resigned to fight to the bitter end.

"Ok," she said, very alert. "I can match that offer!"

I could tell by reading the financial news and by the way all of my mortgage people were talking, that 4.25% was about as good as I could get that day.

So, I told Jessica to redo the paperwork. I was going to buy her latest offer.

"You're sure now?" asked Jessica with a touch of plea in her voice. "You won't change again if State Farm or someone else makes a lower offer?"

I assured Jessica that I would stick with her now. I could sense that she was on thin ice by offering a "lock" on that rate. Later I found out that she had to work hard to get that offer since it did not exist for her going in.

What is the moral of this story?

1. With mortgages, at least, the savings by negotiating fiercely can be very significant. In this case, we will save $40,000 by getting 4.25% instead of the $4.85% over the 30 year term.

2. It makes sense for mortgage bankers and any other businesses to provide their best offer up front. If you don't, be sure to avoid sending your client to pick up information on the way to close the deal.

3. I have a friend who negotiated the price on a washer/dryer at Sears. That guy had moxie!

4. The phone is your friend! When buying things, it is much easier to negotiate vigorously on the phone. In person negotiations can be a pain.

5. Mortgage jokes are not very funny. "If you think no one cares you're alive, miss a couple of house payments.

Photo credit:

Greg Cryns
20000 Credit Card Debt
Instant Niche Emails This is a fantastic list building tool. It is an incredibly simple way to create a year’s worth of emails for any niche market literally overnight! (also can also be used to create 52 blogging posts and more!)


  1. I just want to say that It was very good post, it helped me in finding a good affiliate,

  2. One can get easily mortgage refinance loan at 4.5% fixed rates.

  3. I dont have the information which one is best, Reserve mortgage or mortgage refinance, i hope you will explain the differnce between them.

  4. Looking around for some financial help, a secure plan for fulfilling that big dream of yours? Try one of the Cheapest Mortgage which is best for you on affordable rates.

    Mortgage Loans

  5. Valuable information and excellent design you got here! I would like to thank you for sharing your thoughts and time into the stuff you post!! Thumbs up.


  6. Well that was a nice way to secure the best rate during that way. I have relatives in New York City who are currently working on their refinancing options. While my husband and I, being soon-to-be homeowners, have recently found a nice home, thanks to our Alberta mortgage broker.

    Since we're about to be free from the economic downturn, the housing market will surely offer great rates for aspiring homeowners. The Calgary mortgage company where our broker works for has been providing a lot of deals for its clients.

  7. hi guys,

    I am from NY and had a loan that was not performing and wanted to reduce the rate. We found a very good idea on a website [url][url]. It may help others.

    A good day,
    Ben Gold

  8. One of the most important things to do before starting real estate deal to find is experienced and well-organized escrow officer. The escrow officer is one who puts together all essential elements. The escrow officer brings everything together, including all paperwork various parties involved in deal need to fill out.

    outlook add ins

  9. I have been a Loan Officer for the past seven years and have worked my way up to office manager at my company. On Monday I will be turning the tables on the market. I plan on opening a company that will review Good Faith Estimates for consumers to let them know what would be the lowest offer they should expect. They can then take my numbers back to their LO and let them know that this is what they want or they are going to walk. I have a contract set up with a Mortgage Company that states they will match any offer I propose in the event that the loan officer they are working with refuses to agree on the terms. My service will come with a 100% money back gaurntee. This way you won't have to envolve your insurance company or other loan companies in your business. Make sure to look for Big Brother Refinance Consultants in the very near future.

  10. I really like reading through a post that will make people think.
    Also, thank you for permitting me to comment!

    my web blog Angry Birds Online

  11. I was able to find good advice from your blog articles.

    Take a look at my page -

  12. bookmarked!!, I like your web site!

    Here is my web blog ...

  13. Professionalism: The chauffeur is always very professional and will
    put your needs first, as opposed to other transport services that
    only concentrate on getting you to the airport.

    Call to speak with a courteous service representative at 204-999-1860 or visit then
    online to learn more. If you are visiting a new town or country to which you have never been before and don’t even have any friends there
    who can show you around, hiring a limousine service is a great option.

    Also visit my weblog; Location limousine Casablanca

  14. Your post sucks. Mines better! Just kidding.
    Just getting into this blogging thing myself, though I don't think anyone actually reads my posts. Does it come easier with time?

    my site Fort Worth Mom **