Just as you can land a lower credit card rate by simply asking your credit card company for one, you might secure a better mortgage rate by asking the lender.
Calling your mortgage lender and asking for a lower rate is both unconventional and uncommon, writes Colin Robertson, the former account executive for a wholesale mortgage lender who runs the site. Still, it works for some folks.
How to request a lower mortgage rate
Asking your mortgage lender for a better interest rate is technically as simple as picking up the phone.
There’s a hitch, though: Make it clear that you are not interested in refinancing the loan with the lender, Robertson notes. If the lender thinks refinancing might be an option, the company is liable to try to pursue that option with you.
Additionally, borrowers might have better luck asking and receiving in certain situations. They include:
- The mortgage lender and mortgage servicer (the company that collects mortgage payments) are the same entity.
- Your interest rate is much higher than current rates. A 30-year fixed-rate mortgage averaged 4.81 percent as of the week of Nov. 21, according to Freddie Mac data.
Of course, asking for a lower mortgage rate might simply get you a “no” in response. But as with credit card rates, you have nothing to lose — and potentially a lot of money to gain — by asking for a lower cost to borrow.
Securing a lower interest rate will decrease the total amount of interest you pay over the life of a debt.
Other ways to reduce mortgage interest costs
Refinancing a mortgage takes a bit more work than simply picking up the phone, but it’s an option worth considering if requesting a lower mortgage rate fails.
Use a free online resource like Money Talks News’ mortgage rate search tool to learn the types of rates for which you might qualify. The tool will give you customized rates based on factors such as your location and credit score.
Then, check out “Mortgage Rates at 8-Year High: How to Refinance Before It’s Too Late.”
If all else fails, though, remember that you can always make extra payments on your mortgage debt. This tactic can decrease the total amount of interest you pay over the life of the loan.
For more options, see “7 Painless Ways to Pay Off Your Mortgage Years Earlier.”
Have you or would you ever ask your mortgage lender for a lower rate? Share with us by commenting below or over on our Facebook page.