Can you negotiate with your lender?

Asked by Trulia San Diego, San Diego, CA Tue Feb 5, 2013

Interest rate, loan amount, etc?

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5
Kari Shea, Agent, San Diego, CA
Wed Feb 6, 2013
BEST ANSWER
Hi,

We would say "it depends" on the following:

1. The loan servicer (WF, B of A, Chase, etc) and their terms with the investor.

2. The investor on the loan, the individual or group that actually owns the loan.

3. The current loan balance, is it over $625,500 which is the maximum Federal Housing Finance Agency (FHFA) for "permanent" high-cost areas for SFR.

4. The status of your payments, current, late, very late, NOD filed, etc.

5. The level of communication with the loan servicer and the loan holders time and commitment to pursue the negotiation.

Hope this helps,

Mark & Kari Shea
Shea Real Estate
mark.kari@shea-realestate.com
National Association of Realtors
CA DRE License 01713506
0 votes
Kevin Sander…, Agent, San Diego, CA
Tue Feb 5, 2013
Hello,

Are you referring to a new loan or a current loan?
Since you mentioned "loan amount', I am thinking you are referring to a current loan.
If you are referring to a loan that is already in place, most lenders will not negotiate the interest rate or loan amount and they will not change the terms of the loan just because you ask them to.
UNLESS
you miss a payment, or show a hardhip. Then, they are more likely to negotiate a lower rate or lower your loan amount.
So, the question then becomes: "are you willing to take a hit on your credit, to get better terms on your loan?"
This is also assuming that you do not qualify for a normal refinance, so a litttle more information could get you some more accurate answers. Feel free to contact me directly if you would like to hear more about what I mentioned.

Kevin Sanderlin
Keller Williams Realty
Cell 858-212-4702
kevinsanderlin@gmail.com
http://www.KevinTheShortSaleGuy.com
0 votes
, ,
Tue Feb 5, 2013
We wil re-negotiate our rate if you can provide us with a written lower offer from another lender (such as the Good Faith Estimate)...As Chad mentionned it; we want to make sure that you are comparing apples to apples.
0 votes
Chad Basinger, Agent, San Diego, CA
Tue Feb 5, 2013
Hello Trulia,

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.

Sincerely,

Chad Basinger, REALTOR®, CPA, CFP®
858-997-3704
chad@chadbasinger.com
Web Reference:  http://www.chadbasinger.com
0 votes
, ,
Tue Feb 5, 2013
Negotiating with us is "Accepted"
0 votes
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