How to Negotiate a Better Deal with Your Lender on Your Home Loan Mortgage

I invested the better part of the last 3 days trying to figure out which of three mortgage banks had the best offer. Here’s a simple method to getting the best loan deal that I discovered through my troubles:

Ask each lender to send you a “Lending Estimate” document. This is a legal document, whereas, the other documents they send you with their estimates are not legally binding.
The Lending Estimate document is standardized, so you’ll be able to compare apples-to-apples.
Only look at the “Origination Charges” and “Services You Cannot Shop For” sections of the Lending Estimate, as these are the only sections that the lender has control over. Put differently, this is where all their fees are listed (in plain sight!).
From here, you’ll be able to compare lender-to-lender!

Once you have the Lending Estimate in hand from a few competing banks, you can then compare actual costs of each lender and choose the best one.

Additionally, you’ll be able to play them off each other to secure a better deal for yourself. e.g. “Can you do better than ___’s offer? [Lending Estimate attached]”

For whatever reason, Lenders keep things confusing and non-standard. They are sweet, helpful people, and it’s easy to like them – and up until this time, that’s what I focused on!

But by cutting through the niceties and focusing on the “Origination Charges” and “Services You Cannot Shop For” sections, you’ll be able to focus on the nuts and bolts and save yourself serious buckerinos!

You’re welcome.