Negotiating + Financing

Can you negotiate the rate and terms of your mortgage when you're buying in NYC?

  • A higher down payment gives you access to better rates and terms
  • It’s a good idea to shop around with different lenders for the best rate
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By Emily Myers  |
December 19, 2022 - 9:30AM

Your leverage as a borrower typically comes down to your down payment, credit score, and assets.


When you’re getting a mortgage in NYC, are the terms or the rate negotiable?

Negotiations play a big part in the buying process in NYC—you can haggle not just over the price but in some cases whether the buyer or seller pays the flip tax or other closing costs—so it makes sense to wonder if a buyer has leverage when it comes to the terms and rate of a mortgage. The answer is: Sort of. Mortgage rates are determined by the market but also by the risk you present as a borrower. 

With mortgage rates high and the economic future uncertain, it’s currently difficult to negotiate the terms of a loan from an individual institution, says Pat Lavell, originating branch manager at CrossCountry Mortgage. 

He points out the Dodd-Frank Act, passed after the 2008 Financial Crisis, set guidelines for lenders in order to remove bias and eliminate claims of discrimination that could arise if different terms are offered to borrowers who present the same level of risk. 

Even so, lender guidelines do allow for better rates and terms in exchange for a lower risk transaction. So as a buyer, with a bigger down payment, better credit, and higher assets and deposits, you’ll get better rates and terms than someone with marginal credit and a minimal down payment. 

How to improve your terms and lower your rate

To offset the rising cost of a mortgage, many borrowers are protecting their credit score to get a lower rate and also moving funds to banks where they may be eligible for a rate discount. It's also possible to buy points to lower your rate. Still, many borrowers want to know what leverage they have when it comes to negotiating the terms of a mortgage.

Kevin Leibowitz, founder of Grayton Mortgage, says it is possible to get a lender to cover some or part of the fees you incur—for example, your credit report or appraisal, but he points out the terms are dictated by market pricing. You may have come across prepayment penalties—fees associated with paying down part or all of the loan early—but these are virtually non-existent in today's market so that’s unlikely to be something you’ll need to negotiate.  “A borrower is best to shop around with different lenders to see which is priced better,” Leibowitz says.

An important caveat about getting multiple quotes is that having lenders run your credit score numerous times can lower it. This is called a hard inquiry. Make sure it’s a soft credit inquiry requested by you, which doesn’t affect your score. 

Getting help when shopping for the best deal

A mortgage broker rather than a loan officer at a bank will be able to shop around for the best deal and provide you with the most flexibility on a challenging transaction. A loan officer at a bank can only offer the bank’s own products while mortgage brokers are not tied to a specific product from a single institution. Mortgage brokers tend to offer better customer service but are not the best source for jumbo loans. 

You will also want to see whether you qualify for incentive programs. For example, first-time buyers in NYC can get help from an array of programs, including SONYMA and FHA loans, and mortgages that only require 3 percent down.


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Emily Myers

Senior Writer/Podcast Producer

Emily Myers is a senior writer, podcast host, and producer at Brick Underground. She writes about issues ranging from market analysis and tenants' rights to the intricacies of buying and selling condos and co-ops. As host of the Brick Underground podcast, she has earned four silver awards from the National Association of Real Estate Editors.

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