As most mortgage brokers and mortgage agents in Mississauga, can attest to, is that it would be prudent to get anything of value from a mortgage refinancing commitment standpoint, in writing. I can not count the number of times I was in the branch environment, across from customers who were blue in the face, confirming that a departed employee of my branch had promised the client a mortgage rate discount or a rate, that was just not in our computer system. I recall being in my early twenties, and applying for a loan, where the officer told me that upon approval of my application, the rate would drop by 3%, if I maintained a good payment history for 6 months. Being naive, I accepted the terms, only to learn six months later, that the rate was not going to change, and the loan representative who promised me the rate reduction had since left the company (It is important to keep in mind, that unless a mortgage or loan agent has completed your full application, with an approval, they should NOT be making any promises they cant keep).

The only way to ensure I have some clout and ground to stand on in mortgage rate negations, is to have the rate and terms promised in writing, acknowledging the terms and conditions agreed upon in the mortgage refinance rate discussions. Another benefit of putting the discussions in writing, is that it allows me to solidify my understanding of the meeting and clarify any questions I may have, that may seem awkward to bring up right after a comprehensive meeting, where I may have missed pertinent to the mortgage refinance information provided.

Importantly, I have found that email can serve as a valuable tool, when it comes to dealing with the awkwardness that may be associated with in-person mortgage negotiating or perceived haggling when it comes to mortgage refinance rates. And why wouldn’t I want to negotiate a fraction of a decimal point in savings, which could save me tens of thousands of dollars over the complete amortization of my mortgage refinance? The following points, below, is the structure I generally abide by, when communicating with big corporations in the lending business. It is a great equalizing tool, given the response rate is nearly 100%, and it allows me to drive the mortgage refinance negotiation on my terms.

Acknowledge the meeting and my pleasure in the professional mannerism of the mortgage representative.Reconfirm my understanding of the process, mortgage products, mortgage refinance rates (after the application approval) and recommendations made during the meeting.

Express an interest in consolidating my day to day financial needs with this respective lender and branch in particular going forward.

An open request for cutting the best posted rate by .50% off the best solution provided by the mortgage representative.

In the beginning, I was somewhat hesitant asking for the one percent off their mortgage rate, given that most mortgage lending institutions deal in quarter percentage point increments, however, I realized the worst they can do is say no, and the best I could do is save thousands of dollars off my mortgage refinance! Taking this into consideration, the request for half of one percent off the posted mortgage rate, somewhat conservative and reasonable when beginning the refinance rate negotiation.

My follow up strategy, after sending my first email mortgage refinance correspondence

In the unlikely event, I get all that I asked for in my initial email, I am all set to proceed with the mortgage lender and will arrange for a confirmation of the terms of approval in writing and I will sign the relevant paper work. However, more than likely, I have found it may be necessary to further engage the lender’s representative, as he or she may not know how to respond to my request immediately. One thing to keep in mind, is that many mortgage refinancing institutions reward their sales representatives by paying them a limited commission, which is tied into how much of a discount they provide the customer on the mortgage refinance lending transaction.

Just be aware, this is an internal game of risk/reward that some large mortgage lending institutions play with their staff, and is not something that should make anyone hesitant to negotiate for a better mortgage refinance rate, when it comes to setting up a new mortgage or second mortgage refinance. So, in the event I have not received a response from the mortgage lender within seven days of my first email to their attention, I will usually engage in a second email communication which begins with the same subject line as per my previous email, with the following italicized statement: * second request*. Another great tool I use at the end of my second email, is a sentence requesting a response to my mortgage refinance email by a certain calendar date. For example, I have written to the mortgage representative, asking for a response to my initial email, I may then insert a final sentence stating:

I would like to thank you for your prompt attention to this matter by Thursday, January 14 , 20xx, to allow me the necessary time to determine how to proceed with my mortgage refinance application.

It would not hurt to bold the day and date in the above sentence, giving it a sense of urgency to the mortgage representative about the mortgage refinance request. A few friends of mine have used the above statement with great success in many other areas of business, and in some cases, altered the wording to suit their needs at the time of negotiation. I would, however, make sure to incorporate a definitive timeline as to when I can expect a response from the other party regarding my refinance mortgage rate in any sort of correspondence of this nature.

The above, are just a few techniques that have served me well when it comes to dealing with big bureaucratic institutions and the process of negotiating a better mortgage refinance rate. In the worst-case scenario, I may get a “no” response, but I have found that I usually get close to what I am asking for, or, the best that the mortgage lender can offer me at that time.

I also do realize the above process is time-consuming and requires some patience in dealing with mortgage refinance discussions. In the event these negotiations seem too time consuming, based on your schedule, or something that is just not your cup of tea; consider engaging a mortgage broker or mortgage agent that can do the negotiating for you. Most mortgage brokers and agents have an inside department with many large financial institutions that does not require them to haggle on a regular basis. This could save you time and ideally peace of mind, knowing you have a dedicated mortgage representative in your corner, handling the entire mortgage refinance process on your behalf.

Victor Kaushal.
victor@bestrefinance.ca
416-895-6074