Negotiationg Mortgage Loan Terms

Negotiating mortgage loan terms requires a borrower to understand the current interest rates, as compared to the London Interbank Offered Rate (LIBOR) or prime lending rate on conforming loans. A borrower should also understand their FICO score and be able to work with the lender to lock in a rate that reflects their ability to borrow and pay back the loan.

Step 1: Understand Rates and Credit

A borrower should do the necessary research on the prevailing LIBOR or prime lending rate as a basis for the rates available for a loan. This will allow the borrower the ability to speak the lender’s language when discussing loan terms.

The borrower should also have a handle on their own FICO score and make adjustments where necessary to be deemed creditworthy for the loan, including addressing delinquencies and other unfavorable reported items.

Step 2: Ask for Comparable Rates

With the information in step #1, the borrower should review the offer made by the lender and ask for the top available rate relative to a comparable borrower.


Preparation before meeting with the lender and persistence when asking for a low interest rate are the key to a successful negotiation.