Quote:
Originally Posted by Azure
This!
Its insane how many people I know who have signed multi million dollar mortgages and didn't even bother to haggle on the rate, or shop around.
Why do people think banks are not in it to extract as much money from you as possible? Shop around for a car, haggle about the price, and go from dealership to dealership looking for the best price. Buy a house, sign with the first lender without asking questions. Crazy.
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I know people who will spend months agonizing about the price of a car or home and negotiating, but then just accept the first bank rate they get. It's pretty baffling. They'll put all this effort into saving $5-10k on the property, but then lose out on entire interest points, costing themselves far more.
Quote:
Originally Posted by Fuzz
Sure, but if you start at the 4, you can bargain even lower. I always did.
Always start your bargaining several months before your renewal is up, as it gives you more time to work them, and the rate gets guaranteed for awhile so if they happen to go up, you are still covered. But if it is dropping, you can keep hammering them. When you bring in other rates, they'll typically play a line like "the conditions are different, those rates wouldn't apply to what we are offering". It's usually a lie, so sometimes it's good to have a list of what that rate offers, just to cut them off on that one. But you can also throw a "well, I think you can do better than what you are offering, check with your manager and get back to me. No rush."
It also helps to get a really junior person who doesn't know the computer systems, and may type in the negotiated discounted rate in the original rate box, then add -1 or whatever in the discount box as well. This may not happen often...
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Never had a mistake that saved me 1%, but was always able to negotiate great rates, with a very similar process to what you describe. That is typically why I push for 5 years though. I've always managed to either get a great fixed rate or a variable rate that was prime minus a significant amount. I really didn't see the benefit to 4 years in those scenarios.