Keen to access a better interest rate, more flexibility and extra features on your home loan? Save yourself the hassle and the paperwork and instead of refinancing, negotiate with your current lender for a better deal.
It’s a mistake that many existing customers make, according to Mina Mavrogeorgis, regional director of the Maroubra branch of intouch Finance – and that is, they fail to realise how much they can achieve by simply talking to their lender.
“A home loan that works for you can save you thousands of dollars over the term of the loan,” she points out.
Here are Mavrogeorgis top five strategies to help you be more proactive with your current loan so you can access a better deal:
1. Ask, and you shall receive
“Don’t be afraid to contact your lender and ask what they are prepared to do to strengthen your relationship with them,” Mavrogeorgis says. “You may be pleasantly surprised with their response and if they can reduce your interest rate, then that’s a great win for you and it keeps you in touch with your financial strategy.”
2. Do some research and shop around
Many people just stick to the major banks and the non-bank lenders, but that’s a short-sighted view, Mavrogeorgis says. “Building societies and credit unions are also offering lower interest rates, often attached to a more competitive and attractive deal overall than the mainstream banks,” she explains.
3. Demonstrate quality
Ensure that you pay your mortgage on time every month for a period of at least six months. Then, arm yourself with your last six months of loan statements and show them to the home loan managers you are negotiating with: it demonstrates that you are a quality borrower, and that they will be taking on a minimal risk in offering you a better deal.
4. Be prepared to act
“The perception amongst the major lenders is that you won’t move on from them,” Mavrogeorgis says. You are an important person and they need to treat and communicate with you accordingly, so get them to commit to what you want from a relationship, and be prepared to act if they don’t deliver.”
It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan