How to Get a Better Deal with Your Home Loan

Let us share with you a secret most people don't know about home loans: you can negotiate and get a better deal from your bank. Yes, the truth is that interest rates change, and you and your bank could build mutual trust the longer you are with them. You could use these factors as leverage to lower your payments and improve your financial health. Plus, it won't be necessary for you to apply for refinancing if you could get a better deal. We'll fill you in with more details in the list below, so read on. Let's start with...

  1. Paying on time. When it comes to negotiation, you have to give something in exchange for the thing that you want. In this case, you need to be able to show your lender that you are a trusted and a low-risk borrower, and that you pay your mortgage on time. Doing this makes you a valuable borrower in your lender's eyes. As such, they would likely think twice about letting go of you.
  2. Checking their competitors' rates. Part of being a good negotiator is also about knowing what your lender's competitors are offering. Once you find good deals, you can have even more leverage, as you can tell your lender that you could get a better deal somewhere else. If they value you as a client, they might try to give you an equally-attractive offer. When you do your research, also consider the rates of building societies and credit unions, as they might be able to offer you more attractive packages and interest rates.
  3. Asking for a better deal. Your lender won't hand out a good deal to you on a silver platter-you have to tell them to give it to you. Therefore, you need to ask them how the two of you can strengthen your relationship further, knowing that you are a trusted a borrower. Chances are that they will offer to give you a better deal in terms of lower interest rates. What if they don't? Then you must be prepared to move somewhere else. It would be easier this time since you've already done your homework and you know who can give you the kind of deal you're looking for. It's your right and your finances will thank you for it.

In sum, always try to get the best deal you can find. You could do this by doing research and maintaining a good credit standing. These factors can provide you with more leverage once you go to the negotiation table.

Need more help? Our qualified advisors at Rate Detective are ready to help you find a better deal on your home loan, by lowering your interest rates, or getting you shorter terms that you can afford. Contact us today!

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Published on October 10-th, 2012 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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