Considering the level of financial commitment, you are going to make by taking out a home loan, it is only sensible for you to want to know how to get the lowest mortgage rate possible. It is important to remember, that the lowest mortgage rate possible for you, will heavily depend on your financial circumstances. Whatever the hypothetical lowest mortgage rate possible may be, it is more important to know what is achievable for you personally. That said, there are a few things you can do to improve your bargaining power.
For home loans Gold Coast that home buyers trust, call Oak Tree Finance, your independent mortgage broker on 0404 403 066, e-mail us on firstname.lastname@example.org or get in touch online to speak with a home financing advisor today. We can help you take the first steps to achieve your home ownership dreams.
Briefly, How to Get the Lowest Mortgage Rate Possible?
- Prepare – there is something to be said about the leverage that doing your due diligence can give you. Get your finances in order and become a “dream borrower”.
- Compare – shop around. Even if you have a preferred lender you would like to borrow from, knowing what rates their competition offers will give you the ammunition you need to negotiate.
- Ask for a deal – no lender will give you their best deal if you do not ask for one. Remember, to a lender, your mortgage is an investment that is meant to generate a return.
- Negotiate – leverage your financial situation, as well as your knowledge of the lending market and negotiate with your chosen lender to arrive at terms suitable for everyone involved.
- Stand your ground – be ready to walk away from the negotiating table. While it is up to the lender to give you their best deal, be ready to move on if that ‘best deal’ is not good enough for you (remember to be realistic in your negotiation though). The lender will either consider your application or they will lose your business. This may be enough of an incentive for the lender to give you that extra break.
- Use a mortgage broker – if all the steps above sound like too much trouble, or if you are simply too busy, contact a mortgage broker and outsource the legwork to them.
How to Get the Lowest Mortgage Rate Possible in More Detail
1. Do Your Homework
Doing your homework and due diligence can give you a significant advantage in negotiating with lenders. Getting your financial affairs in order and tying up loose ends like lingering credit cards or car loans, backed by as complete a documentation of your financial situation, income and spending habits as possible, can help you position yourself as a dream customer to lenders. It is harder to refuse a good deal to someone who can demonstrate themselves to be a financially responsible borrower.
2. Compare Different Lenders
To pit lenders against each other in a fight for your business, start by researching the deals available on the market. Keep in mind that the best deals possible are almost never advertised in the open. Think of it as of price matching a new TV at a retail store – you cannot ask for a price to be matched if you do not know the lowest sale price available on the market for a given product. You also need to be able to actually show your findings to the lender, so make sure to diligently record your evidence. Even if you have a preferred lender you would like to borrow from, knowing what rates their competition offers will give you the ammunition you need to negotiate.
3. Ask for a Deal
To a lender, your mortgage is an investment. Investments are meant to turn a profit and that is why you have to pay interest. Because of this, no lender is going to give you their best deal if they can get away with it. Asking for a deal is the necessary first step to getting one.
4. Negotiate and Bargain
If you have done your due diligence and prepared for your application by getting your finances in order, researching the market, and gathering all the documentation, you are in a good position for negotiations. If you are well informed by your research, it will be harder for the lenders to “pull wool over your eyes” so to speak – do not be afraid to bargain by making use of what you have learned.
5. Be Prepared to Walk
The lender has the option of either giving you a deal or not getting your business at all. In many cases reduced profit is still worthwhile for the lenders to consider when faced with the option of no profit at all. Be prepared to walk away if you do not think the deal is good enough, but also be realistic because the lenders have the same option if you are driving too hard a bargain.
Use a Mortgage Broker
If you ever thought that using a mortgage broker is just paying someone to do the legwork for you, you could not be more wrong. There are tangible advantages of using a mortgage broker. A broker can not only do all the legwork for you, but also:
- Find the best deals available.
- Help you secure a loan tailored to your particular situation.
- Most importantly, in Australia the service is free to you.
At Oak Tree Finances we can help you achieve the great Australian dream of home ownership on your own (or as close as possible to your own) terms. Call us on 0404 403 066, e-mail us on email@example.com or get in touch online today to leverage our experience and in-depth industry knowledge in negotiating the best loan terms with mortgage lenders.