February 13, 2020
Some people are born negotiators, and they don’t mind telling the rest of the world about it. But more people seem to feel uncomfortable with the idea even when it’s in their best interest to do so. Are you trying to buy a home?
If so, you’ve already committed to spending a lot of money to make this important investment. Why pay MORE if you don’t have to?
Negotiating the details of your home loan can save you money and get you a better deal. Does it have to be uncomfortable and awkward? No. Actually, you can negotiate quite successfully by asking one simple question, but that question needs a bit of homework to ask properly.
What’s the secret to negotiating a loan? What is that one question? before we get to that, you will need to review the home loan options offered by three lenders or more.
It does not matter whether you want to build a house from the ground up using a construction loan, or if you want an FHA mortgage to buy a condo or a house in the suburbs.
Get info on the going interest rates offered by the lenders, the cost of the lender’s origination fee, and how much the loan will cost you over the full term of the mortgage (assuming you don’t sell the home or refinance it).
With that information from three lenders, compare the information to see who offers the best deal.
You can choose the lender offering the best options. But you don’t have to. What if you like the terms but you’d rather use a different bank?
Call that bank, ask them to give you the same information you got from the other lenders. As soon as you know their offer, check to see if it is lower than the best one.
If not, ask one simple question. “I got better terms from lender XYZ. Can you beat their offer?”
That is the simple negotiating question. You are not going back and forth, you aren’t trying to act like you know more about the home loan process than you really do (to appear to be a strong negotiator), and you don’t have to do anything but ask one easy, non-confrontational question.
If the lender can’t match the best offer you’ve gotten, you can choose to accept their terms anyway, walk away, or think about it and commit (or not) later.
And this is a tool you can use to get the best deal for any major loan; an auto loan, home loan, refinance loan, etc. You don’t have endure endless back-and-forth on the cost of your loan. Just ask the question after you do the research. You’ll be glad you did.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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