How much can you bargain with a mortgage lender?

Question

home loans are harder to come by. so can you bargain with lenders to request closing costs paid for by the lender. or for an even lower interest rate? or anything else?

Answer 1

Bank of America has a no fee mortgage.  If you have great credit (over 720, i think) and put at least 10% down, the only costs are your prepaid items and the recording fee.

Answer 2

The lender doesn't pay closing costs.  That is between the buyer and seller to agree on.

Answer 3

Yes to all your questions.  However, if you are having the lender pay for closing costs, you can expect a higher interest rate.  Brokers, direct lender's, and banks do not work for free.  They have to make money somewhere.  Typically when you want the lender or broker to pay the closing costs, they do not charge fees for compensation.  They receive compensation from the lender in the form of a YSP (Yield Spread Premium).  This is done by increasing your interest rate a little bit.  They take these funds and apply them to the closing costs which pay for third party charges such as title & escrow fees, county recording fees, etc.  Whatever remains after they deduct these fees is what the broker or lender makes on the loan.  Brokers in most states must disclose any compensation they are receiving from thier lender to thier client at closing or before.  Banks and direct lenders are not required to disclose this  information.    

Keep in mind many seller's are very open to paying for closing costs if that helps the buyer purchase the property.  

Which way is best?  That depends.  If you plan on living in the house a long time, go ahead and take the lowest rate you can get and pay  the closing costs or have the seller pay them.  If this is a quick property flip then you will want to keep your out of pocket expenses as low as possible so the having the lender take care of the closing costs might be best.

Take the time to sit down and get a few quotes from a few different lenders.  Be sure to explain exactly what you are trying to do so they can best match you with the best program for your needs.

Hope this helps.

Answer 4

You might be able to bargain with their commission on fee's.  They may not have alot of control over closing costs, but it doesn't hurt to try.

Answer 5

are you dealing with lender or broker?

brokers can deal with different lenders and squeeze lenders more effectively

IF you have excellent credit and good down payment, you are in better bargaining position

Nothing ventured--nothing gained

Answer 6

You can bargain with the mortgage broker a bit as they are paid on commissions and some commission is better than nothing.  When dealing with the lender directly they have set formulas and won't deviate from them, but usually they have different options.  

You can of course choose the type of loan, but also you can vary the interest rate a bit depending on the amount of points you pay and they often have special programs too.  Also, you can, of course, shop different lenders to try to get the best deal.  

Beyond that though they don't bargain so much, you have to work within their formulas or go somewhere else.

Answer 7

The lender I work for (BIG bank) doesn't bargain.  Period.  It's pretty much take it or leave it.  We start by offering you our best rate, and the adjust up if your credit doesn't meet our standards.  If your buying a home, you could try to get the seller to pay some of the costs.

Answer 8

Sure - you can bargain for a lower interest rate - if you are willing to pay points up front.  

Lenders will not pay closing costs, but you might be able to get the seller to pay them if they are desparate to sell their property.

Answer 9

The only way you can get a home loan right now is if you have absolutely perfect credit and a great income. And good luck on the bargaining front. You could possibly bargain with the seller, but I doubt you'll get very far with the lender. Good luck!