After the American housing bubble popped in 2007, qualifying for a mortgage in the country has been a bit harder. Naturally, the lender is extra cautious to avoid a repeat of the worst financial crisis since the Great Depression. Home loans still sell because the demand never really goes away, but creditors have a stricter vetting process to weed out bad candidates effectively.
Although mortgage lenders, especially in Arizona, are understandably more careful with the customers to choose to accept, they are more considerate than we like to give them credit for. The negotiability of every home loan in Tempe, Phoenix, Tucson, and other communities in the state can still be considered a well-kept secret.
If you meet the basic requirements of the loan program, you can talk your way to a better interest rate and other costs. While you are free to haggle, there is no guarantee that the other party is going to budge on the initial offer.
Below are common reasons why mortgage lenders decline to negotiate.
They Can Tell That You Have Not Done Your Homework
Knowledge is a powerful negotiating tool. You do not have to know the lending business inside out, but it helps to understand how the other party makes money out of the deal. Learn about the fees and look for ways to use them to your advantage.
Also, realize that there is no such thing as a free lunch. Be prepared to make concessions f compel you, prospective lender, to grant your request.
A mortgage negotiation is achieved not when one gets a short end of the stick. Instead, it is when both parties are content with what they got and can live with what they had to give up.
They Are Not Impressed by Your Credentials
Before you initiate a negotiation, make sure you are in a position to do so. If you lack the qualifications to convince your lender to give in to your demands and accept more risk by taking you as a customer, you can’t make a strong argument when pleading your case.
Again, do your research. Understand what makes a good borrower to improve the inadequacies of your credentials and face your prospective mortgage lender a more attractive customer.
They Know You Have No Other Offers
The mortgage business is quite a competitive landscape. Quotes from the “other guys” can be a useful bargaining chip, for lenders hate to miss out on a good customer.
But then again, using the competition to your advantage is only viable if you have other offers. A mortgage lender will know whether you have shopped around because every pre-approval triggers a credit check. If the other party does not see any hard inquiry on your credit report, they will likely not take your scare tactics seriously.
In any mortgage negotiation, the first one to blink loses. You might feel that you need them more than they need you, but lenders are also desperate to loan to as many borrowers as they can.
