No one necessarily wants to deal in subprime loans, but sometimes past mistakes and a low credit score force you to do it anyway. The subprime loan market is there for those who do not qualify for traditional loans. If you have a poor credit history, then there is a good chance that you will have to deal with a subprime lender at some point. Therefore, it is in your best interest to know how to handle them when the time comes. Even though they are subprime mortgage lenders, the rates they offer are still negotiable, but will also be more than for a normal loan. So you need to do everything you can to negotiate the best rate and save yourself some money. Here are a few tips for negotiating the best rates for subprime loans.
1. Be Persistent
When you are negotiating anything, one of the most important things to keep in mind is that you need to be persistent. If you just ask for something once, there is a good chance that they will not give in to your demands. If you persistently make a request or act as if it is already a done deal, they will be much more likely to negotiate. If the lender tells you no or will not budge on the interest rate, do not give up. They want to do business, so simply come back again and again until they budge a little. You should not make unrealistic demands, but you can make a bit of a difference if you stick with it.
2. Do Your Research
When you are negotiating with a subprime lender, you need to give them a reason to lower their rate. Portray that you have done your homework and have sufficient research to make your case. Having another quote from a different lender that proves you can get a lower rate is a great way to make them work with you. Shop around and get a few different quotes from several lenders. This will give you a great tool to use in your negotiations. If you do not take this step, they will most likely not give in to your requests or offer you the best deals.
3. Ask About Closing Costs
The interest rate that they give you is not the only thing that is negotiable. When you are there negotiating, do not be afraid to ask them about the closing costs on the loan. Sometimes you can get a lender to concede something in the closing costs even if they will not budge on the interest rate. Some of the closing costs may be bogus, anyway. Therefore, asking about them is a good way to bring it out on the negotiation table. And once again if you are persistent in your requests, the lender may be willing to throw out some of the closing costs not needed and help you get an approved loan deal.