Buy 10 coffees at Lazy Bean and get one free.

Accumulate 40,000 points on your credit card and earn a free flight

Buy two packages of diapers at Target and receive a $10 gift certificate.

These are just a few of the many promotions that companies offer to build brand and customer loyalty.

These types of promotions are used by all types of entities and the prizes can be in the form of services, stuff or money. Furthermore, the promotions tend to apply for new customers as well as to reward current customers for their continued loyalty.

I remember many years ago going into a bank with my mother and seeing a table filled with all types of appliances. My mom opened a new account and we got to choose one of the items from the table to take home with us. Since then I’ve opened many new bank accounts and have yet to receive a toaster. More often these days the prizes are points to use to buy from a catalog of items or cash. The trick is you generally have to spend a lot to accumulate enough points to earn something of value.

However, mortgages can provide a big immediate benefit. Banks view mortgages as products that lead to a more complete relationship and therefore often offer special promotions to bank customers whether they have been with the bank for years or they establish a relationship at the time they obtain a mortgage. The ability to leverage the other banking products enables the bank to earn less on the loan. A non-bank lender has nothing else to sell and therefore had better earn its income on the loan. In addition, since larger loan amounts usually apply to a customer with more banking needs, the rates on loan amounts exceeding $418,000 has become more attractive than for smaller loans.

For example, for a $418,000 loan, Citibank offers ⅛ percent off of the usual rate if you have $50,000 on deposit including savings, checking and investments. $250,000 gets you a ¼ percent  off the rate while one million is good for ⅜ percent off. At times, there are discounts highlighted on the citimortgage website. If you are employed by one of the many companies Citibank has a corporate relationship with, you can get $750 off of the closing costs. Typically, you have to choose one promotion as the discounts won’t overlap, but the many different promotions usually provide the borrower with some discount if they presently have an account or open an account during the process.

At times, your loan officer can also request special concession pricing to try to get you a better price. The bank is normally more responsive when there is a relationship.

Loyalty is rewarded in more than just price. At times, when your loan does not fit into the specific guidelines, exceptions can be made. The bank is also more likely to respond favorably to these exception requests when there is a relationship between the bank and the borrower.

Your realtor is going to recommend certain names of lenders they work with. While it is always a good idea to take references from a trustworthy source, it is also important to realize that nobody cares about the best rate as much as you do. This is likely going to be the largest investment you will be making, until your next home purchase. It’s clearly in your best interest to do a little due diligence on your own to make sure you’re getting the best product. Many people, including realtors, have the misconception that because non-bank lenders can approach many banks, they will get the best rate. The fact that top banks are not offering their best rates through the bank’s loan officers provides the best opportunity for more cross selling within the bank’s other products.

So, by all means, call the names that are referred to you and find out what rate you will receive. Then get your free coffee, pick up your Target gift card and call your bank to see what rate they can offer. You’re the one making the next 360 payments. Make sure you get the best price.

By David Siegel

David Siegel is a home lending specialist with Citibank in its Englewood office. Many of Siegel’s customers benefit from the relationship pricing offered by the bank, especially relating to purchase loans. He will be hosting a homebuyer seminar for buyers interested in exploring Westchester. The seminar will be held on March 8 at the K Grill House restaurant. Dinner is included. Siegel can be reached at [email protected] or 201-419-1330 for a quote or a pre-approval.