Bonus: Negotiating with a broker
Not all banks and brokers are bad. You just need to learn the game to recognize when you are dealing with a honest or dishonest one. I want you to understand that legally the most they can make on a deal is 4.99% of the loan amount. No one is going to give you a loan for less than 1.5 points. I don’t give a damn what they are telling you, they have to make money on the loan. And that is not a bad thing. After all, they are working hard to get you a six figure loan.
Now, for the negotiating, you need to go into the bank already having a general idea what you qualify for. You should know your credit score and do research on what your middle credit score qualifies you for. Be upfront with the bank/broker about what you are willing pay. I believe the sweet spot is between 1.5-2.0%. If you can get your points in between that range, you are winning. Let me tell you how to use those points. Never take points in the back end. You want the lowest rate possible to get give you the lowest payment from month to month. Take your points on the front end because you can write those off on your taxes. If you want to be savvy, use points to get rates that are below par (sorry kids, I’m teaching more about this in the iLoan class that is in the Tackle Membership).
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