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Negotiating a Mortgage Note

By Tiffany Raiford

It might not be a well-known fact, but many Denver mortgage lenders are willing to negotiate your mortgage rate. Negotiating your note, however, is a different story. While it can technically be done, it's often referred to as a loan modification and it's a bit more complicated than simply renegotiating the terms of your mortgage note with your lender.

Negotiating Your Mortgage Rate

When it comes to applying for a loan, you have some power. If you're a strong borrower with an excellent credit history in your favor, many banks will work with you if you attempt to negotiate the rate. However, if you have less than stellar credit, lenders don't really want your business as much as they want the business of someone with great credit so you lose a bit of your negotiation skills. All you have to do is ask and see what happens. Sometimes mentioning that you're going to another bank or lender because their rates are lower might garner you a sort of "price match" guarantee.

Modifying Your Mortgage

Another form of mortgage note negotiation is a loan modification. Since you can't just call your mortgage lender and ask for a lower rate or payment, you might have to modify if you can no longer afford your current mortgage payment. Since the downfall of the economy in 2008, many homeowners have turned to modification to help keep them in their homes as they can no longer afford the payments due to job loss or loss of wages.

Modification is the act of working with your lender to create a more doable plan for paying off your mortgage. You will have to fill out plenty of paperwork and supply your lender with plenty more paperwork in the process. You'll be asked to provide financial information including your income tax returns and your current debt to income ratio. From here, your lender will decide if lowering your payment to a more affordable payment for a certain amount of time is going to help you pay your mortgage. The rules are very strict and it's not always easy to get a modification, but it is a negotiation you can try for a lower mortgage payment.

Negotiating your mortgage note might not be something that everyone can do, but it is something that you can certainly attempt. The positive outcome of your negotiation depends largely on your lender and your own financial history. While it's not likely something that will happen for you, it never hurts to ask.

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