Lenders offer mortgage rebates and rate discounts

A recent decline in the number of customers shopping for mortgages may be bad news for lenders but it’s good news for consumers. The fact that mortgage originations were down 29 percent in the final quarter of 2006, compared to the same period in 2005, has resulted in lenders becoming increasingly competitive to win business. Rate discounts, typically offered by lenders only to preferred customers, are now being offered by some lenders to anyone applying for a new mortgage or home equity loan.

Select lenders are also offering mortgage rebates and pricing guarantees. One bank recently introduced an offer to pay $250 to any customer who finds a better deal and decides to go with another lender after filling out a home loan application.

Other lenders are following the lead of LendingTree.com and forming partnerships with airline loyalty programs and offering frequent flyer miles to customers who close on a new mortgage. The amount of mileage rewarded varies from one lender to another, but in some cases taking out a mortgage could pay for your next vacation.

For a limited time, LendingTree is also providing a guarantee. It’s promising its lenders can meet or beat any mortgage offer on 15- or 30-year fixed-rate loans of $100,000 or more, or it’ll pay you $500 cash. (Some terms and conditions apply.)

Not a bad time to be shopping for a mortgage!

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