When dealing with a large financial institution, negotiating a better refinancing rate for your mortgage can sound intimidating, if not an outright terrifying task when entering your local branch. Sitting on the other side of the desk, and contemplating the power that the mortgage representative may have in approving or declining any mortgage application, can be a daunting exercise, however, with the following tips I have followed as a former agent myself, I am certain the information shared in this installment will bring some value in any conversation pertaining to a refinance rate with a large mortgage lender.
” Let us never negotiate out of fear. But let us never fear to negotiate.”
– John F. Kennedy
In today’s fast pace society, we have more options to communicate with than ever before. Email, text, skype, fax, automated forms and voicemail are all great tools, however, these should only be incorporated in my discussions regarding my rate, after I have personally spoken with the mortgage lender’s representative and have obtained their contact details. As a former mortgage representative, I have watched technological advancement in the industry and how most lenders are investing millions of dollars in technology and process to ensure individuals apply for their lending products via their website, automated form or in some cases an electronic application. In my opinion, I believe the rationale is two pronged. One, they would rather save costs via an automated process, and secondly, to maintain some distance, where human reasoning and negotiating is taken out of the equation (this actually cuts down on their overhead). The reasons I advocate for speaking directly with a mortgage representative and obtaining their contact details, personally, are for the following:
There is limited personal accountability when applying via online, fax or mail applications: After I have filed the necessary information in the form provided, my application is stored on a data base, where some underwriter (the person who evaluates and makes a decision on my application) will eventually “pick-up” my data and action the file as they see fit. I have seen instances, where clients accidentally put a check mark against a liability as being paid in full, where there existed a minimal balance, and an application being rejected outright, as the underwriter felt the client was being deceitful on the application. One can then imagine, how any other inadvertent errors or omissions could easily result in a decline of a refinance application. It is therefore, important to speak with the mortgage refinance representative in person or over the phone, and go through the interview, so as to have a clear understanding of the questions being asked on the application and provide any clarifying information to the representative that may be needed on items that will be listed on the credit report.
No definitive timeline as to when to expect an approval/decline of my refinance application when applying via the internet, fax or paper application: In many cases, the underwriter, whose identity may be unknown, will generally not contact me in the event of a decline of my refinance application. At times, there may be further information that is needed, and if the underwriter feels its appropriate, they will contact the retail lending branch and have a representative contact me by either email or phone, to provide any missing items that they require to approve. This could possibly extend the application process by days or weeks, depending on the volume and staffing shortage the underwriting department is experiencing at that particular time.
During this meeting over the phone or in-person, I would make sure to ask open ended questions of the representative, as to what trends they have noticed in the market regarding refinance rates, and what refinance product is most cost-effective given my personal circumstance. I would also ask for any and all relevant printed material that the institution has available along with the contact details of the mortgage representative for further review upon completion of our meeting. If I was dealing with a large bank, I would make sure to get a brochure of all the rates and terms for the refinance products the institution is offering along with their highlighted recommendations. This information would be critical to present to a mortgage broker when obtaining a mortgage refinance rate. Further, I would depart with a written copy of all costs associated with the refinance and any fees/charges applicable with the products I would be considering. Unlike a mortgage broker, this one bank will NOT be able to offer me anything other than their own products and services, and it would be important to have their best offer in writing.
Once I receive notice from the mortgage representative of the approval of my refinance application, I would ask for a confirmation of this approval in writing on the lender’s company letterhead, inclusive, of the principal amount and amortization terms for the mortgage being considered. This all may sound elaborate for a mortgage loan, however, in large institutions, there is usually significant turn-over of staff, and this makes it difficult to get accountability pertaining to mortgage terms once the original staff member dealt with, moves on to another opportunity.
The above scenario does take time and personal resources to ensure you cover your basses in negotiating with a big bank. In the event this sounds like too much of a hassle, why not consider a Mississauga mortgage broker to assist with this process? A mortgage agent can shop multiple lenders for you, so as to ensure you get the best refinance rate in-line with your particular circumstance. This would save you time from having to go from one bank to another, making multiple appointments and taking time out of your day (and evenings) to meet with different mortgage lenders. Simplify your life! Give me a call and leave the work of finding the best mortgage product in our hands.