The mortgage rate discount and negotiation suggestions

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Topic Author
proudowner333
Posts: 90
Joined: Sun Jan 16, 2022 6:50 pm

The mortgage rate discount and negotiation suggestions

Post by proudowner333 »

Hello,

I am new here and this is my first post.
I signed a contract to buy a first new home late last that will be ready in next few months this year 2022. I am working with Wells Faro, but I just found out about relationship mortgage discount through this forum. I have a portfolio account with them and after reading this thread I assume that I am eligible for the rate discount.
Can someone tell me how much discount to expect - let say from $250K to $1M portfolio?

Also, can someone help me with the following questions -

1. I see that WF has higher mortgage rate compared to other lenders - for example, other lenders are offering 3.125% when WF is offering 3.375% for 30 yrs fixed Jumbo loan here in California. How do I negotiate to get them to 3.125% and offer me discount based on my amount in portfolio account.

2. I also noticed that WF processing fees are quite higher compared to other lenders, what are the tricks to negotiate this fees and get discount if possible.

3. Is there any rate discount for putting more towards down payment - such as 25% down payment instead of 20% ?

4. I also heard from other people that if I manage my own escrow such as property tax, property insurance, I can get discount on the rate too, is it also true?

I am getting them to lock my rate soon as I am worried that the rate may shoot up more and my house closing is most likely will be in May 2022.

Any other things that I should be talking to WF loan officer to get me a better discount ?

Looking forward to your input, suggestion, and help.
Thank you in advance.
Carl53
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Joined: Sun Mar 07, 2010 7:26 pm

Re: The mortgage rate discount and negotiation suggestions

Post by Carl53 »

Welcome to the forum.

Take a look at this thread. viewtopic.php?t=280692
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galawdawg
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Location: Georgia

Re: The mortgage rate discount and negotiation suggestions

Post by galawdawg »

proudowner333 wrote: Mon Jan 17, 2022 1:56 am I am working with Wells Faro...

1. I see that WF has higher mortgage rate compared to other lenders - for example, other lenders are offering 3.125% when WF is offering 3.375% for 30 yrs fixed Jumbo loan here in California....

2. I also noticed that WF processing fees are quite higher compared to other lenders...
Welcome to Bogleheads!

Given what you posted about WF (not to mention their bad behavior), why are you working with WF???

I'd recommend you shop around for rates and unless there is some reason you are wedded to WF, go with a reputable and trustworthy lender who offers a more competitive loan package from the start.
NabSh
Posts: 377
Joined: Fri Dec 25, 2020 11:09 am
Location: USA

Re: The mortgage rate discount and negotiation suggestions

Post by NabSh »

Your best bet would be to contact your banker and ask. See what they have to offer.

I'd you are building a home, some large builder offer discount closing fees.

Try bankrate dot come.
Topic Author
proudowner333
Posts: 90
Joined: Sun Jan 16, 2022 6:50 pm

Re: The mortgage rate discount and negotiation suggestions

Post by proudowner333 »

Thank you for your responses. I am working with them for that following reasons:

1. I can get relationship discount.
2. They are ready to do long term rate lock without any fees and I can get discount as per point 1.

I absolutely like to work with my local credit union but they do not offer long term rate lock and that is my challenge in this volatile market.
playtothebeat
Posts: 497
Joined: Thu Jan 24, 2013 11:39 am
Location: southern california

Re: The mortgage rate discount and negotiation suggestions

Post by playtothebeat »

proudowner333 wrote: Mon Jan 17, 2022 9:29 am Thank you for your responses. I am working with them for that following reasons:

1. I can get relationship discount.
2. They are ready to do long term rate lock without any fees and I can get discount as per point 1.

I absolutely like to work with my local credit union but they do not offer long term rate lock and that is my challenge in this volatile market.
#1 and 2 only matter if the economics are better than what you can get with other lenders.
Have you checked places like better.com, lenderfi.com, etc?
Topic Author
proudowner333
Posts: 90
Joined: Sun Jan 16, 2022 6:50 pm

Re: The mortgage rate discount and negotiation suggestions

Post by proudowner333 »

playtothebeat wrote: Mon Jan 17, 2022 10:32 am
proudowner333 wrote: Mon Jan 17, 2022 9:29 am Thank you for your responses. I am working with them for that following reasons:

1. I can get relationship discount.
2. They are ready to do long term rate lock without any fees and I can get discount as per point 1.

I absolutely like to work with my local credit union but they do not offer long term rate lock and that is my challenge in this volatile market.
#1 and 2 only matter if the economics are better than what you can get with other lenders.
Have you checked places like better.com, lenderfi.com, etc?
Yeah I have been tracking better.com for a while but hard to find someone with a good option of long term rate lock.
DMB41
Posts: 106
Joined: Fri Nov 20, 2020 1:55 pm
Location: Rocket City

Re: The mortgage rate discount and negotiation suggestions

Post by DMB41 »

proudowner333 wrote: Mon Jan 17, 2022 10:47 am
playtothebeat wrote: Mon Jan 17, 2022 10:32 am
proudowner333 wrote: Mon Jan 17, 2022 9:29 am Thank you for your responses. I am working with them for that following reasons:

1. I can get relationship discount.
2. They are ready to do long term rate lock without any fees and I can get discount as per point 1.

I absolutely like to work with my local credit union but they do not offer long term rate lock and that is my challenge in this volatile market.
#1 and 2 only matter if the economics are better than what you can get with other lenders.
Have you checked places like better.com, lenderfi.com, etc?
Yeah I have been tracking better.com for a while but hard to find someone with a good option of long term rate lock.
Better was willing to rate lock for 75 days for my new construction home when I was going to use them. How long of a lock were you looking to get?

As for how to get the best rate, I highly suggest reading through this immensely helpful thread (at the very least the last 6 months or so): viewtopic.php?f=2&t=289559&start=12700

It's very long, but extremely helpful. The very quick summary though it to sign up with Better and get them to match their own advertised rates on site like Bankrate and Zillow. In general, they have the most competitive rates out there, although with the recent increase in rates, who knows. You could use the rates from Better to get WF to match if you wanted. I have a more in depth summary of what I just mentioned in a spreadsheet I made located here: https://docs.google.com/spreadsheets/d/ ... sp=sharing
Topic Author
proudowner333
Posts: 90
Joined: Sun Jan 16, 2022 6:50 pm

Re: The mortgage rate discount and negotiation suggestions

Post by proudowner333 »

DMB41 wrote: Mon Jan 17, 2022 10:58 am
proudowner333 wrote: Mon Jan 17, 2022 10:47 am
playtothebeat wrote: Mon Jan 17, 2022 10:32 am
proudowner333 wrote: Mon Jan 17, 2022 9:29 am Thank you for your responses. I am working with them for that following reasons:

1. I can get relationship discount.
2. They are ready to do long term rate lock without any fees and I can get discount as per point 1.

I absolutely like to work with my local credit union but they do not offer long term rate lock and that is my challenge in this volatile market.
#1 and 2 only matter if the economics are better than what you can get with other lenders.
Have you checked places like better.com, lenderfi.com, etc?
Yeah I have been tracking better.com for a while but hard to find someone with a good option of long term rate lock.
Better was willing to rate lock for 75 days for my new construction home when I was going to use them. How long of a lock were you looking to get?

As for how to get the best rate, I highly suggest reading through this immensely helpful thread (at the very least the last 6 months or so): viewtopic.php?f=2&t=289559&start=12700

It's very long, but extremely helpful. The very quick summary though it to sign up with Better and get them to match their own advertised rates on site like Bankrate and Zillow. In general, they have the most competitive rates out there, although with the recent increase in rates, who knows. You could use the rates from Better to get WF to match if you wanted. I have a more in depth summary of what I just mentioned in a spreadsheet I made located here: https://docs.google.com/spreadsheets/d/ ... sp=sharing
I am looking for 120 days of rate lock at the moment. I found few local lenders who are ready to do 90 days for new construction.

Whoa.. you have done quite a bit of work on spreadsheet. Thanks for sharing it with me. I have registered with better also, thanks for your suggestions.
I will also read through the other thread you sent me.
Topic Author
proudowner333
Posts: 90
Joined: Sun Jan 16, 2022 6:50 pm

Re: The mortgage rate discount and negotiation suggestions

Post by proudowner333 »

NabSh wrote: Mon Jan 17, 2022 6:58 am Your best bet would be to contact your banker and ask. See what they have to offer.

I'd you are building a home, some large builder offer discount closing fees.

Try bankrate dot come.
My builder is Lennar and they are offering 3K closing cost discount but their rate even today is higher then other lenders, god know what will it be during the closing period.
doss
Posts: 554
Joined: Tue Nov 01, 2011 9:52 am

Re: The mortgage rate discount and negotiation suggestions

Post by doss »

As someone that recently signed a purchase agreement on a new construction home, I will go ahead and also read the links posted here. Thanks for the tip on better.com, etc!

I also realized that Ally is using Better for their home loans, and there is a relationship discount of $500.
“ The long-term 9%-10% nominal return of the stock market INCLUDES the crashes.” — calvin+hobbs
Topic Author
proudowner333
Posts: 90
Joined: Sun Jan 16, 2022 6:50 pm

Re: The mortgage rate discount and negotiation suggestions

Post by proudowner333 »

doss wrote: Mon Jan 17, 2022 11:36 am As someone that recently signed a purchase agreement on a new construction home, I will go ahead and also read the links posted here. Thanks for the tip on better.com, etc!

I also realized that Ally is using Better for their home loans, and there is a relationship discount of $500.
Ally is really competitive in this market. I am planning on using them to compete with other lenders. Let see how successful I will be.
Golf maniac
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Location: Florida

Re: The mortgage rate discount and negotiation suggestions

Post by Golf maniac »

For #4, actually if you don’t use an escrow you pay a slightly higher rate or more in closing costs as the servicer doesn’t have access to your escrow funds all year. I would shop around and then if you want a specific lender show them your rate and closing cost quote from another lender with lower rate and costs.
Topic Author
proudowner333
Posts: 90
Joined: Sun Jan 16, 2022 6:50 pm

Re: The mortgage rate discount and negotiation suggestions

Post by proudowner333 »

Golf maniac wrote: Mon Jan 17, 2022 8:02 pm For #4, actually if you don’t use an escrow you pay a slightly higher rate or more in closing costs as the servicer doesn’t have access to your escrow funds all year. I would shop around and then if you want a specific lender show them your rate and closing cost quote from another lender with lower rate and costs.
Thank you.
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