Creative Mortgage Negotiation

[Adam Wright]

Hey Bigger Pockets Community,

I'm inquiring about mortgage negotiations and creative structure for primary residence. Thinking outside the box, what're some common/uncommon concessions that I might be able to work in(or out) to a loan? I know the easy answer is pay cash. How to negotiate lower APR, set period of interest only, get points/fees waived, etc.?

Nashville, TN - primary residence - >740 credit score - conventional

-Adam

[Chris Mason]

If you are working with a mortgage bank that 'defaults' to offering higher-than-market rate/fee combos, you can negotiate that away and arrive at the true par pricing. Here's some fat, go trim it.

If you are working with a wholesale mortgage broker that 'defaults' to starting with true par pricing, there's nothing to negotiate. There's no fat to be trimmed here. 

The best you can arrive at is true par either way, up to you how much time you want to spend on that (you need a broker if you want to save time), or if you need the emotional sense of victory (you need a banker if you want to be quoted something high, that you negotiate down, for that emotional victory [in marital situations, this is often REQUIRED, and mortgage brokers suck at fulfilling this marital requirement]).

You can also swap rate for fee and fee for rate to your heart's desire through either channel, I typically just show my California clients the wholesale rate sheet and let them tell me what they want. In the last month I've funded 3.125% and I've also done 5.625%, it makes no difference to my personal paycheck (federal rule).

No, you can't 'negotiate' an interest only period into a Fannie loan...