"When are mortgage prices negotiable, or are they ever?" The general rule is that interest rates and points are negotiable when the person the borrower is dealing with has the discretion to change them. (Points are an upfront charge expressed as a percent of the loan.) In most cases, borrowers deal with either commissioned loan officers (LOs) or mortgage brokers. LOs usually have discretion to change the rate and points, and brokers always do. Commissioned loan officers (LOs) are employees of lenders, but they have many of the characteristics of independent contractors. Their main job is to find borrowers and take their applications. They are compensated largely or entirely by a commission expressed as a percent of the loan amount. LOs usually have limited discretion to depart from the price sheets they receive every day from elsewhere in their firm. If they can charge the borrower more than the price on the sheet, it is called an "overage," and the LO may share it. If the LO is f...
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