Mortgage Magic II

We were asked yet another question about mortgages that I'm sure would really help anyone who knew the answers. Now let's get ready to rumble!

Dear Munnybagz,
I was just wondering if you could tell me how to negotiate a better mortgage, because I am sick of always having to pay off interest instead of the base mortgage. Please help me!
Mad at Mortgage

Dear Mad,
Although you may hate your mortgage rate, you have to realize that mortgages have the lowest interest in comparison to all the other loans. But there are a few tricks and tips that can help you get the best deals.
  • hunt around for mortgages at different banks or go to websites that compare mortgages.(such as mortgageshark.com)
  • when you're talking to a bank about a mortgage and you're not sure whether or not you're getting the best rate, ask them what they're best rate is, because you found a bank that gives a very good mortgage rate.
  • remember, banks always make money off your mortgage, no matter how little they charge. But the higher mortgage rate, the more they make, so if you tell them that another bank has 4.5 %, they will try to go better than that to get your business.

That should help you a little bit, Mad, and anyone else who wants a better rate. Stay tuned for our next episode, and send in your questions!



Anonymous said...

This site reveals some amazing money secrets!

Anonymous said...

Here is the trouble, you can't lie about the rate you were given by another institution. What happens now when they call your bluff on the 4.5% , then they go back and pull your credit report and because you had opened a credit card in the last 5 years of your 5 year term they decide that 'your credit situation changed' so they call your mortgage and either take your house or you need to refinance somewhere else.

Though that scenario is very unlikely to happen given the competition in the mortgage game, but is actually within the banks power.

Just thought I would point out that shopping around and negotiation is one thing, but flat out lying is completely different.

silverm said...

Use a mortgage broker!