All's Fair in Negotiating a Mortgage
My wife and I are good clients; our bank knows it.
Our mortgage comes due in October. We're thinking about our options now. Why? Well, there are many reasons. First of all, we have an excellent bargaining chip in our pocket; we ARE good clients. Our mortgage payments are there every 2 weeks, and anyone who lends to us will never have to worry about a bounced check. Secondly, we have a good credit rating. We both have good jobs. So, why should we meekly accept whatever offer our bank gives us when we are looking at renewing our mortgage? Last but not least, the more we know about what interest rates are doing now, as well as what kinds of new options we can get on a mortgage, the better prepared we will be.
There's no reason not to shop around, and lot's of reasons we should.
We have many bargaining chips. We both have a good credit rating; we are a desirable client. Other financial institutions are likely to offer us really good rates to steal us away from our current financial institution. If we get these offers in writing, we can show them to our bank. Are they likely to counter - offer in order to keep us? You bet. And if they don't, we've got a better offer.
Most lenders will try to scare you into staying with them with fees to transfer your mortgage and other such stuff. Frankly, if you are a good client, the lender who is trying to woo you away will likely pay a good chunk of those fees if not all of them. And if we end up saving 1/2 percent or more by moving, we will more than make up the difference over the life of the mortgage.
It's not about being "nice" to Harry the branch manager, who always gets you a coffee when you come in to discuss your finances. It's about getting the best deal. You might buy a stereo from your cousin even if it cost you a bit more. But your mortgage is different. You could be saving thousands over the long term if you get the right rate.
So, you should prepare to do your homework, and make no apologies.
And that's what it's all about.