Mortgage brokers like to remind us that, in the end, it’s not about your down payment- it’s about the rate of interest required. They’re not wrong. The mortgage industry operated without oversight for a long time, and it often acted against the interest of consumers. New laws have tamed it- but it’s still important for you to get a good rate. And if you didn’t- now may be the time to renegotiate. Here are some tips.
Who do I approach about my rate?
Your mortgage broker will be able to help you with this a little, but they will be approaching the lender’s ‘loan officer’. These persons used to earn money the same way as most sales people, with a ‘commission’ type structure that actively encourage either raising the customer’s rate, closing costs or both. This, of course, is why shopping around for your loan is essential. Nowadays, however, commission has been frozen so that there is no incentive to cheat the customer in this way. The old system meant that shopping around was a good idea, but that your chances of negotiating with a bank officer was next to zero. This has now changed. Click here !
Will a mortgage broker negotiate for me?
Some mortgage brokers can handle the negotiation part for you, and others can’t. It depends on the agent you are using. It’s a tricky balance, as, in effect, you want to reduce the income going to the bank [your rate] without adversely affecting the commission of the loan officer themselves, or they will not be on your side in the process. Firstly, know that it’s never a problem to simply ask. Ask what they can do, and if they can improve the loan rate- the worst the can do is answer back no.
What else can I do to keep my rate low?
Mortgage brokers will advise you to tidy up your affairs in the years preceding your purchase if you have had issues with bad credit before. Do everything you can to get your credit score up, and you will automatically qualify for better rates. Don’t be afraid to shop around through different mortgage products, too. The standard mortgage people think of is far from the only product out there…don’t be afraid to look at other mortgage types. There are lenders who specialise in bad credit, or offer military veterans loans, and much more- there may well be a better loan product out there waiting for you to use it, rather than the conventional mortgage. Lastly, remember that, while it can be hard to assemble, a larger down payment will often mean a better mortgage rate for you as the bank can offer you less of a loan in the first place.
Negotiating a better mortgage rate for your home is not an easy process, but it can be done. Don’t be afraid to ask what room for negotiation there is, and remember to chat with your mortgage broker about the best type of loan for your needs. Find out more in this site : http://www.mortgagebroker247.com.au