While it’s true that mortgage brokers will do the bulk of the work for you when getting a home loan, it’s still important for you to know where the price cuts are taken.
This kind of knowledge will help you check if you are indeed getting the best deal and is also ultimately useful should you decided to do things on your own.
Getting The Best Home Loan Deal
Below are a few things that are wise to keep track of when getting a home loan –whether or not you are working with a broker.
Negotiate your upfront fees
On top of the monthly amortization, you will have to pay upfront fees. These include application fees and stamp duty. While the latter is pretty much fixed, some persuasion can help bring application fees down.
Skilled brokers or (even you!) can help take off as much as $600! We know that’s some really exciting savings there, but don’t forget to pay attention to how this price cut can sometimes affect the interest rate.
Negotiate for lower upfront fees and if possible, lower interest rates as well.
Negotiate lower interest rates for bigger savings
Did you know that some lenders offer a higher interest rate discount when your loan is over $150,000? Take a look at this example.
Imagine that you have a $500,000 loan that you have to pay for 25 years. You will be offered an initial per annum discount of 0.50%. you can save around $2500 on interests per year. In 25 years, the total savings would amount to $62,000 and that’s hard to ignore.
Although that looks a lot, you’d be surprised to know some were fortunate enough to raise their discount up to 0.7%. So, you have to give negotiating a shot because the amount you save is worth the effort.
Seek good counter offers
Shopping around is what they call it when a mortgage broker or a borrower looks for a loan with better terms. Now, brokers can tell you which lenders are willing to negotiate and that’s very important. That way, you evaluate the terms yourself.
In addition, you could compare if the counter offers you receive are reasonable.
Always be honest about your financial health
When you’re actively looking for options you tend to get excited every time you see an offer that seems good. But in the end, the most important thing is your ability to pay the loan off comfortably.
You need to think about managing your finances once you start with the repayments. Also, consider a few changes that could happen during the term of the loan and think about handling those.
Start things right
Now that you know how the best deals are achieved, you can look after yourself better when taking on a home loan. It’ll be easier to scrutinize deals because you have a better idea of how the process goes.
You shouldn’t hesitate to talk to your mortgage broker about things that are a little unclear to you. Qualified brokers have received specialised training and know the latest updates in their field.
At Finance Ezi, our qualified and experienced mortgage brokers are here to help, please call us on 1300 003 003 for assistance with finding the best home loan deals or submit an application online to get started.