How to Negotiate your Canadian mortgage deal
Negotiating a mortgage is about more than just the rate.
Negotiating a mortgage deal can be a daunting task, but it’s worth the effort to get the best possible deal. Here are some tips to help you negotiate your Canadian mortgage deal:
Know what it means to negotiate a mortgage: You can always get a better rate than the one posted, as long as you negotiate. Besides the interest rate, you can also negotiate some of the contract details, such as prepayment options, appraisal fees, and cash-back benefits. What you’re able to get really comes down to your negotiating skills.
Know when to negotiate a mortgage: There are three specific times when you want to negotiate your mortgage. When getting a new mortgage, when renewing your mortgage, and if you refinance your mortgage.
Ask for a discount: Financial institutions have posted mortgage rates, but they’ll likely give you a discounted rate if you ask. The size of the discount will depend on current market conditions, the strength of your application, and how discounts impact the loan officer or mortgage broker’s pay and bonuses.
Do your research: Before entering into any negotiation, understand the mortgage market and what other lenders are advertising.
Expect initial setbacks: Be prepared for rejection and persevere. If you can expect rejection without getting disheartened, then you can get somewhere. The professionals you’re speaking to negotiate these deals for a living. They do it every day. They will come up with all sorts of reasons why they can’t give you a better deal.
Start low: Compare the lender offer to the best-advertised offer you can find on the street. Anchoring off of this rate puts pressure on the lender to meet at least halfway.
Understand the costs: Ensure you understand all the costs associated with your mortgage, including pre-payment limits, pre-payment penalties, conventional vs. collateral mortgage costs, and appraisal costs.
By following these tips, you can negotiate a better mortgage deal and save money in the long run. Remember, it’s important to be patient and to do your research before entering into any negotiation.
