Looking for a low-priced mortgage? Take some advice from the Best Rate Web site put together by Warren Myer, an ex-mortgage broker. Here are his tips:
- Negotiate a fixed fee with mortgage brokers. You "hire" a mortgage broker to help you obtain financing. The best way to negotiate with brokers is to agree on a flat fee (say, $2,000) or a fixed percentage (say, 1 point). That way, brokers are not biased toward any lender.
- Negotiate reduced costs with direct lenders. Ask for a reduction in fees for things like paperwork and underwriting. If the company has padded your mortgage with $2,000 worth of such fees, you can probably knock off at least $200. Tell the loan officer you're shopping around and you want the best deal available. They get paid on commission, so they won't care if there's a reduction in fees as long as they make the sale.
- Track your mortgage company. In the past, the one way to get the rate that was quoted you was to lock it in when you applied. Of course, the rate can change if your loan is delayed for any reason. Now you can do business with mortgage companies that publish their rates on the Web every day. So before you apply, track rates from several different companies. Check to see if the mortgage company's pricing strategy is consistent. Some companies price aggressively one week and then pull out of the market the next.