August 27, 2021

Learn How You Can Negotiate Mortgage Interest Rates

How to Negotiate Your Mortgage Interest Rates

One of the most important steps of purchasing a home is making sure you get an affordable mortgage rate.

You have to be ready to negotiate if you want to secure the lowest rate possible for the property you want. Of course, negotiating isn’t as simple as going to the bank and asking for the lowest rates. There are steps you should take to ensure you get the best interest rates. You can check these steps below:

1. Know where you stand – A mortgage broker can help assess your needs and repayment capabilities, which banks consider when negotiating with borrowers. Your broker will likely ask you some home loan health check questions to get more information.

2. Know what mortgage terms you want and need – This will make it easier for brokers to determine your threshold and make recommendations based on those limitations.

3. Get quotes from multiple lenders – You need to learn to shop around for the best rates. Don’t just settle for the first quote you get. Ultimately, you have to look at the value of the mortgage before you sign anything.

4. Compare total loan costs – Sometimes, even though it seems like your loan amount is big, the net amount that you will get is a lot smaller because it covers all the transactional fees. You need to make sure this isn’t the case with the loan you go for.

5. Negotiate with your lender – Be straightforward and be honest. Complete transparency with your lender will make them feel how serious you are about the mortgage and your intentions of keeping the property you’re buying with it.

6. Consider locking in the interest rate – Home loan interest rates can either be fixed or variable. If possible, lock in your interest rate. This will allow you to budget your monthly income more efficiently because your repayment budget stays the same.

If negotiating is not your thing, you can just contact an independent broker like What If We Finance for assistance. We’ll be more than glad to help you get the lowest mortgage interest rates for you.

How to Improve Your Mortgage Negotiation Strategy

A lot of homebuyers, in their excitement to buy their home, fail to shop around before signing a mortgage contract. They usually go with the first bank or lender they can talk to and miss out on several opportunities to get lower interest rates. Mortgage interest rates in Australia can get really high, so you need to be smart about finding a lender. Here’s how you can improve your mortgage negotiation strategy:

These three strategies will prove that you’re a good potential borrower and allow you to negotiate lower rates before you lock.

1. Talk to multiple lenders – The more options you have, the higher the chance you can get the best deals.

2. Ask lenders to match lower rate offers from competitors – You can use competitor quotes when shopping around. If your finances look good, different lenders will want your business. If you show them that you’re eyeing other lenders, they will try to match those offers, if they can.

3. Strengthen your mortgage application – A good credit score will make you a preferred applicant in the eyes of lenders, which is why you should focus on increasing your scores. Home loan interest rate now isn’t going to be the same years from today, so invest in your credit score long before you buy your first property.

If all of this negotiation seems like too much work for you, you can just hire an independent home loan mortgage broker like What If We Finance. We can help you secure the lowest rates for your mortgage, so you don’t have to worry about repayment. Call us today for details.

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