- My partner and I wanted to get the lowest mortgage rate, so we filled out four applications online and got four different offers.
- We got the lowest offer from an online bank, but wanted to work with either a broker or credit union.
- We negotiated with our broker using the offer from the online bank and were able to get our rate down to 3.65% from 3.85%.
My partner and I were on a mission to get the best interest rate possible on our new mortgage.
Increasing the down payment or buying down the rate are common ways to lower the interest rate. We considered those, but the most impactful decision we made was shopping around.
We filled out 4 mortgage quote applications in 3 days
We’re the type of people who will have 10 browser tabs open comparing bed sheets until we find the perfect combination of price and thread count. We approached our mortgage the same way, as a product we could optimize.
Applications for a mortgage quote took 10-15 minutes each and we completed a total of four. The applications asked for the same information:
- Permission to pull a credit score
- Income and employment information
- How much money we had in the bank (assets)
- Down payment amount
- How much debt we had
- Our anticipated house budget
We completed these applications in a period of three days, but not because we were worried about the impact of those hard pulls on our credit scores. Credit scores will take a small hit every time there is a pull, but mortgage quote inquiries made within a 45-day window will be marked as a single inquiry.
A tight timeframe of three to four days was important for relevancy. Mortgage rates are constantly changing, so if we were going to accurately compare, we needed to get quotes back to back.
We negotiated our mortgage interest rate
We received quotes from two brokers, one credit union, and an online bank. We applied for a 30-year fixed-rate conventional loan each time, and each quote was different. We received rates as high as 4.06% and as low as 3.5%.
The lowest rate came from the online bank, but we were already leaning towards the credit union and one of the brokers. Both the credit union and broker said they would try to match a lower rate. It was on us to choose our preferred lender and start negotiating.
It’s not shady to negotiate the terms of your mortgage. In fact, the Federal Trade Commission recommends it. It does take some guts to make the call, though.
We decided to call the broker first. He really impressed us when we interviewed him. My partner navigated this phone call and I was the wingwoman.
The broker originally offered us a 3.85% rate.
My partner confidently said, “We found a lower rate with a different lender. Would you still be able to offer a match?” The broker asked for a few more details about the quote. He needed to know if we were comparing apples to apples. He said as long as we had the official quote and could send it over via email, then he would “run it up the ladder.”
The official quote needed to be more than an email with general notes. We contacted the online bank again and asked them to send over the full quote breakdown. We weren’t really sure it would be the right document, but they seemed to know what we were talking about.
We sent the lowest 3.5% official offer with a breakdown of the numbers to the broker. While we were waiting for his response, we called the credit union and repeated the process. They also asked for the official offer and said they would get back to us.
The broker got back to us the next day and countered with an offer of 3.65%. In the few days that followed, the credit union hadn’t called us back. They were operating on normal banking hours. We went forward with the broker, excited to be saving a little over $50 a month by taking the time to fill out a few applications and ask one question.
If you’re going to negotiate for a lower rate, make sure to get multiple offers from different lenders. Reference the lenders’ promise to offer a match, and confidently ask for it. Have the official offer ready to send over. Take into consideration other factors, like closing fees, before making your final decision.
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