Are 30 Year Fixed Mortgage Rates Negotiable

by Viktor from Germantown, Maryland, USA

Ask Kate: Are 30 Year Fixed Mortgage Rates Negotiable? Hi Kate, Am I in a position to negotiate down the quoted interest rate? I'll be raising my house payment if I refinance. I live in a condo in Maryland. The condo’s market value is approximately at 168K. Got 2 mortgages.

Viktor continues...
1. First mortgage: 5 year ARM (5.125 percent) originated in 2005 for 200K (based on 1 year LIBOR 2.25 margin, 2 percent yearly cap). This mortgage adjusted down in June 2010 from 5.125 percent to 3.125 percent. I owe 178K on the first mortgage.

2. Second mortgage – owe $7800. I was told verbally that there should be no problem subordinating it.

I know that I qualify for HARP because Fannie Mae is the investor on 1st mortgage.

Contacted my mortgage holder refinance loan officer. He said they will be able to approve to loan 176K (105 percent LTV) quoted 5.3 percent (no points) 30 year fixed with $3000 maximum out of pocket at closing.

It’s possible my property value will decrease somewhat more in 2011. And I know HARP is going to expire in 2011.

Does it make sense for me to refinance? Am I not going to benefit from the refinance? (going from 3.125 percent to 5.3 percent). Do you think I could negotiate down the quoted interest rate?

Thank you so much! Best Regards, Viktor

Kate Answers: Are 30 Year Fixed Mortgage Rates Negotiable

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Dear Viktor, I should title this Yes, But, No, Whoops, Instead, Except.

There isn't a simple answer to your inquiry because under your lender's present offer, you will be raising your mortgage interest rate and monthly house payments.

Now why would anyone want to do that! Easy answer this time! For the sake of stability... since your 5 year fixed mortgage now adjusts every year and interest rates have no where to go but up.

Stability of 30 Year Fixed Mortgage Rates

Even so, here are a couple of formulas for comparing interest rates to see if you are getting the best deal.
But back to what I think is your most important question!

Are 30 Year Fixed Mortgage Rates Negotiable

Can I negotiate 30 year fixed mortgage rates? Why not?

In fact, as of the day I am writing this (a little tongue-in-cheek), our economy is based on free enterprise. That means ultimately mortgage lenders, not the government, set interest rates and closing costs based on their own criteria.

But even so, I am often asked if HARP mortgage rates are negotiable. The answer is Yes and But. (Another but?)

The definition of negotiate per is "to deal or bargain with others". But keep in mind negotiating is not a one-way-street. It's a give and take on both sides.

Mortgage Tip: Bring to the negotiating table something the lender wants in return for your best mortgage rate.

How To Negotiate The Lowest 30 Year Fixed Mortgage Rates

Here's a tip to help you negotiate. Because the cost to the mortgage company increases every time a loan package needs to be opened, resubmitted or agonized over, lenders begin to salivate when they think about complete paperwork.

(Believe me, I know this well after spending many late nights in the office away from my family trying to figure out how to fill in the gaps of incomplete applications.)

So here is the best tip for negotiating with your mortgage lender. Get your ducks in a row!

Present your loan application with complete information, details, dates, addresses, phone numbers and supporting paperwork. Include written explanations of anything unusual or difficult to understand. This is easy to do if you use my free mortgage information planner.

Saving the lender time will place you in the strongest position to negotiate for the lowest 30 year fixed mortgage rates. In addition, get all quoted rates and fees, mortgage interest rate lock and promises in writing. Viktor, go for it! I'm cheering for you!

Good luck and best wishes,

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Rising Good Faith Estimate Quote
by: Tom from Centreville, Virginia, Fairfax

Currently, I have a 30 year fixed at 4.5%. I'm considering a refi at 3.25% on a 15 year fixed with a 60 day lock to lower my interest and mortgage term.

My concern is the Good Faith Estimate sent to me is higher than what was verbally discussed with the mortgage banker.

Should I expect the GFE to be revised before proceeding? I'm concerned about what the closing costs will be at settlement.

Also, is it worth arranging for my own title fees which I can get for about $300 less than the Good Faith Estimate amount?

Hi Tom, Kate here...

Whoa! You should be concerned! If your written Good Faith Estimate is already higher than the verbal quote, put on the brakes and investigate until you are satisfied with your mortgage rate and fees.

Otherwise, expect that interest rates and fees could continue to rise! Left unchecked, an unpleasant surprise at closing would be the final step in this progression.

You should not have to arrange your own title insurance. If you have a preferred company, ask your loan representative to order your coverage from that company.

Or ask the title company named in your Good Faith Estimate to match the quote from your preferred company.

Best wishes, Kate

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The information you obtain at this site is not, nor is it intended to be, a substitute for personalized professional advice. All numbers are estimated and are for illustrative purposes. Rates are published for convenience only, vary with no advance warning, are not guaranteed, and should not be relied upon. You are encouraged to consult a lender for a current rate quote and seek advice from qualified professionals, for example, attorneys, accountants, financial planners, housing counselors, mortgage lenders, and/or real estate agents, regarding your individual situation. Comments and opinions found here are not necessarily those of and its owners.

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