Source: CNBC —
Purchasing a home with the help of a mortgage is one of the most expensive financial transactions you can undertake. Given both the costs and commitment that come with signing a mortgage, it makes sense to negotiate the best possible deal with your lender, but the sheer complexity of these loans makes them difficult for most people to know where to start.
It’s easy to fixate on finding the lowest possible mortgage rate. But lower rates can come with extra fees which increase the closing costs, meaning you need to strike a difficult balance between the two. “It’s really hard for consumers to shop correctly,” says Jennifer Beeston, mortgage educator and senior vice president at Guarantee Rate.
To help you better understand how to negotiate the best deal on your mortgage, CNBC select talked with two mortgage experts to get their advice on what matters when shopping for a mortgage.
What to do to get the best deal on your mortgage
“What can put the consumer in a stronger position to negotiate? It’s knowledge,” Beeston says. “It’s always going to be knowledge.”
When preparing to shop for a mortgage, educate yourself on the current mortgage rates. The averages may not apply to your exact situation, but they’ll give you a good idea of what to expect. It’s also important to know what fees the lender can control and how your personal finances determine what rates and types of mortgages you qualify for.
1. Talk to multiple lenders
“There are honest lenders that offer you their lowest upfront and that’s really what you want,” Beeston says. “You don’t want someone where you have to play carnival tricks in order to get a decent deal.”
The number one action you can take to ensure you’re getting the best deal on your mortgage is to get quotes from more than one mortgage lender. This helps you weed out lenders that would otherwise overcharge you.
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