Perhaps it's the Wall Street in me or just my general business sense, but my motto is "Everything is Negotiable". Having said that, it doesn't mean some things are harder to negotiate than others and the results one might want may not always come to fruition. I can assure you that it never hurts to negotiate as the worst thing that can happen is you are right where you started. As one saying goes, "It is better to have tried and failed than to have never tried at all." There are thousands of lenders out there, all competing for business, so you better darn well believe there is room for negotiation.
There is obviously an amount that each lender stands to make based upon the loan they make. As long as that amount is positive, there is room to maneuver. There are situations that a lender may even take a hit, just to gain one's business with the hope of doing larger deals in the future. Granted, I am not a lender, so I can't speak entirely for that profession. However, I do know of some who may take that approach.
No matter what lender you go with, I always encourage clients to get good faith estimates from multiple lenders and to absolutely make sure that you are comparing apples to apples. All too often, people get caught up in what the rate is, instead of factoring in all of the costs involved.
I would like to leave you with this. As negotiable as working with a lender can be, the facts remain that the cost of borrowing money now is historically near the lows and provides a great opportunity for those people out there to take advantage of this situation. Being able to lock in borrowing money at around 3% (after taking into consideration tax benefits) for 30 years is rather amazing. Yes, there is some room on the downside, but playing the odds and probabilities, my bet is that rates down the road will be much higher. Think about it this way...if you had to bet a million dollars that the cost of borrowing money in 1, 5, 10, 15, 20, 25, or 30 years would be lower or higher than 3%, which would you choose? If you happen to choose the under, I'd love to be on the opposite side on any deal negotiating with you.
Chad Basinger, REALTORÂ®, CPA, CFPÂ®