In this video we look at can you negotiate mortgage rates and how to do it.
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So today I'm joined by Mujtaba Syed,
manager mobile mortgage specialist with TD Canada Trust and today the question
we're gonna answer is, can you actually negotiate your mortgage rate?
So Mo, when you're going into your lender or the bank, could you actually say hey--
can you actually negotiate that rate that they're gonna give you?
Yeah, great question Karl. Yes and no. So technically when it comes into it,
every bank, they technically have a rate grid right,
which is what they kind of base on their rates on so they'll look at to see what's
currently available and what's the lowest that they're willing to go?
So when you go in and then you want it when you want to talk to your lender
about your rates, definitely shop around to see what the banks are offering.
Most banks are going to be
just one tenth between each other or if there's a big discount happening from one
lender it's definitely beneficial for you to kind of shop around to competitors and
then speak to your lender about time. Say listen
I know that you guys are offering a certain
rates, but I know your competitor is offering a much lower rate,
what can we do about that? In most in most instances and scenarios
your bank should be able to match that rate. It really just depends on their grid so
definitely have that conversation with them,
and definitely shop around, and it's definitely a benefit--
beneficial thing for you to do is try to shop around get the best rates and take it to
your lender and give them the opportunity to match or sometimes even beat that rate.
Is there any other way besides shopping around, comparing
rates between different banks-- is there any way other way to negotiate that?
Yeah, absolutely. It just depends on your relationship with your lender and your
specialist. Have an open honest discussion with them and say, "Listen
I don't want to shop around, I really enjoy working with you, we have a relationship
here, what's the best absolute rate that you can do for me in that scenario?"
Let the lender get back to you and explain to you that this is the absolute best that
you can do and it's the rate that you're comfortable and you're happy with, then
you know, they've done your job.
But if you feel like hey,
it still doesn't seem right to you and you feel like there's still more of a wiggle
room, definitely have the conversation with them and speak to them about it.
It never hurts to ask.
Does your ability to qualify for a home for a certain amount--
does that impact your ability to actually I guess, negotiate that mortgage rate?
Not really Karl.
So when it comes down to like mortgage rates that we don't really--
like there's a big misconception out there in the market that if you have a
better credit, you might get better rates--
technically credit and other scenarios definitely help you qualify,
but once you qualify, almost everyone is subject to the exact same rates or have
access to the exact same rates.
So it's always-- and that's a great way for us not to kind of penalize
someone who's making some mistakes in their life
et cetera, but everyone has access to get great rates once you're qualified.
So have the discussion with your lender, have that open honest conversation with
them to say, "I obviously want the best rate,
what is it that you're willing to offer me?"
--and see what we can do to make that happen and then kind of go from there.
And the last question is, how do you get the best mortgage rate from your bank?
In my opinion the best way to do it is actually know your surroundings right.
Kind of go to shop around, check rates,
be what we call an informed consumer, be an educated consumer and see
what's available out there, so when you go into a meeting you have
enough knowledge to know what is being --what is being offered to you and then
you can have the discussion with them. It's really hard to have a discussion
without really knowing what's available in the market. You could be thinking about
it in your head that was from five-- six months ago
which is not available today. So kind of go in, have the discussion with them and
definitely shop around.
Has the recent interest rate
increases, has that impact your ability to negotiate?
Yes and no. Another great question
So it's when rates do go up banks have little leeway to see-- they can't usually go
backwards in time to see what's available and maybe their discounts are not that
great. It's also based on just timing alone. So once again shop around
and have that discussion.
It's more than just try to get the lowest rate possible, but always to see what is
also attached to that rate,. You might find a really low rate on the internet
but when you look into what's tied in to that term or
the agreement to get that rate, it might not be beneficial for you. They might have
less prepayment privileges, they might have some exiting scenarios are not
comfortable for yourself or something.
So always look-- always when you're comparing apples to apples right,
so don't really compare rates just because it's a number.
See who's offering that number, where the benefits, the terms are attached to that
lender and their mortgage compared to your lender and your mortgage,
and then kind of decide for yourself what's best. Sometimes it makes sense
to be a slightly higher rate to get the comfort and security of a bigger bank,
to get that maybe a higher prepayment
privilege it if you want to pay it off sooner or if you feel like
it's easier for me to exit or renew my mortgage or refinance my mortgage.
You want to look at all those options.
There's a lot to consider, not just a rate at the end of the day.
Perfect. And my question for you is,
Did you negotiate your last mortgage rate?
And if you have any additional tips, let us know in the comment section below.
Do you have anything else to add Mo?
No, I think that's great.
Perfect, and remember for all our videos on mortgages, mortgage rates, mortgage
approval, see it in the description below.
Thank you very much for joining us and we'll catch you next time.
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Homebuyer's School. Tune in next time
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