3. Keep them guessing
If you want the best mortgage deals today, tomorrow and in the years after that, then never show the deal you get from one competitor to another when shopping your mortgage. The reason is simple and many borrowers mess it up by trying to be too clever by half.
The fact is that lenders and brokers do what they do to make money and I’m yet to find one that will work for free. Fair enough, of course, but the bottom line for all business people (like you and your investment portfolio) is they want to make as much money with as little effort as possible.
That means when it comes to discounting, both lenders and brokers only want to give away “just enough” to win your business. If you get a sharp deal from one provider and show it to another, then you’ll probably wind up with one of two responses.
- The first is sorry, no can do.
- The second is to shave a little here and shave a little there. Sometimes it might even seem like they’re shaving a lot, so make sure you TIC it before you take it. If the deal is real, then the next question is ‘Wow, if they came down that far, how much further can they go?’
If you’ve already shown your hand, you’re left to take the deal when it may not be the best they can offer, or it leaves you teetering between different providers in some kind of time-consuming reverse auction until one or all of you get sick of each other. The simple alternative is to just say, “Here I am, this is what I have to offer, this is what I want. So what’s your best deal? If it’s good enough, you’ll get my business. If not, you can try again when I need my next loan.” Which brings us to an important point.