Wheel and deal on mortgages, but know the bottom line

Sure, credit markets have gone wonky lately, but the good news for people renewing or shopping for a first mortgage is that wheeling-dealing days for consumers are still here.

Mortgage borrowers "still have lots of negotiating power, but you need to know what you can negotiate down to," says Nelly Van Berlo, an Ottawa accredited mortgage professional and president of the Mortgage Source Inc., a franchise of the Mortgage Centre.

It takes some research, self-evaluation and shopping around to come up with a deal that's right for you. Here are some tips on what to ask and where to find information.

Is that the best you can do?

You don't have to be nasty when you ask, but don't be shy either. Asking for a better mortgage rate than the posted rate has become so common that lenders factor it in when they set rates. Yet one common mistake people make is to automatically sign and mail back the deal their lender sends at renewal time. Even if they negotiated a better rate previously, the renewal document most likely is at posted rates, not the discount they got before, says Van Berlo.

Start shopping at competing lenders or at mortgage brokers, who represent a variety of lenders, to get information on your options.

If you find a better deal, ask your lender to match or better the rate. Be careful not to trigger credit checks by potential lenders as you comparison shop. Although it isn't supposed to happen, Van Berlo says multiple credit checks can sometimes hurt a person's credit rating.

What flexibility features and fees does the mortgage have?

Go for the product, not just the rate. Some "no frills" mortgages offer great rates, but potentially expensive costs if you need to get out of the loan agreement before the term is up. Ask about flexibility to make extra payments, increase the monthly or weekly payments.

What's in your financial future?

Lots of people wonder if they should take a longer-term mortgage to lock in today's rates for perhaps five years, or take a short-term approach and wait for rates to fall further. It's helpful to look at all household debts, income, whether job security is an issue, and just how large a payment you can handle. You may also want to discuss your goals and strategy with a mortgage professional you trust.