Whether you’re an investor or an owner-occupier, home loan interest rates can really sting. Here are four tips to help you get a lower rate for your loan.

Let’s say that you’re a budding investor.

You want to get an investment loan for the first property that you’ll add to your portfolio. You look through a few products and see the same thing.

Wealth for Life lender options
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

The interest rate is so high that it’ll have a severe effect on your cash flow. At worst, it could lead to you having to pay money out of own pocket to maintain the property.

Owner-occupiers don’t have it much better. Your income can only stretch so far. After all of the bills and everyday expenses that you deal with, can you really afford to pay huge amounts of interest?

The simple fact is that the interest rate you get for your home loan has a huge effect on your life. Owner-occupiers can find themselves with far less money in their pockets. And investors may find that they can’t build their portfolios as quickly if they have a high rate.

But there may be a light at the end of the tunnel.

In June 2019, the Reserve Bank of Australia made the decision to drop the cash rate to 1.25%.

That’s important for you as a borrower. The cash rate affects the interest rate that lenders offer on their home loan products.

This one change may leave the door open for you to negotiate a lower rate for your loan.

But don’t rely on the lower cash rate alone. Use these four tips to secure the lowest interest rate possible.

 

Tip #1 – Use a Broker to Negotiate on Your Behalf

Think about all of the home loan products that you have access to.

Every major bank offers several that may suit your circumstances. On top of that, you have dozens of smaller lenders who may be able to offer something that suits you.

Wealth for Life Mortgage Broker
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

That could mean you have to sift through hundreds of home loans. Each one has different features and interest rates attached to it.

You’ll have to do a lot of work to understand them all. It could take weeks to figure out which is the best one for you. And that’s time that you probably don’t have, especially if you have a full-time job and a family.

The work could grind you down to the point where you accept a loan just to get it over and done with.

That’s the mistake that so many make.

Usually, this loan won’t be the best one that you can find. And that means you’re going to pay more interest than you should.

This is where a mortgage broker can help.

Brokers specialise in doing all of the legwork that you don’t have the time to do. Plus, they usually have pre-existing relationships with lenders. This means they already understand their best offers.

A good broker can save you enormous amounts of time while finding you the best possible loan. They also know how far they can negotiate an interest rate down until they hit a lender’s breaking point.

 

Tip #2 – Don’t Assume the Lender’s Giving You the Best Deal

Let’s say that you’ve spent the time on research.

You’ve sifted through tons of loan products and figured out which is the best one for you.

Wealth for Life lender interest
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

That’s as good as you can do, right? You’ll have to wait a while before you can try to find a better loan product.

Not necessarily.

The truth is that most lenders won’t offer you their best possible interest rates. They’re in this to make money ahead of serving your best interests. That means they’ll offer the best rate they can get away with.

That’s exactly what Damian Simmons discovered with Wealth for Life:

The owner of two investment properties, Damian Simmons came to us because he felt his bank wasn’t giving him their best offer.

He was right!

Damian had two investment loans, each with an interest rate of 5.03%.

We advised him to switch lenders. His new loans had rates of 4.09% and 4.28% respectively.

The end result was a $7,345.20 saving per year.

Assumptions are a dangerous thing when you’re trying to borrow money. Every lender has their own motives in the loans that they offer.

Again, a mortgage broker can help you to sift through the offers. Plus, they may be able to give you access to loans that you wouldn’t find out about on your own.

 

Tip #3 – Give Your Credit Score a Boost

Your credit score has a huge influence on what you can do financially.

If you have a great credit score, lenders see you as less of a risk. This means you get access to more home loan products. Plus, you’ll likely pay less interest on the loan.

Wealth for Life credit score
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

But if you have a bad credit score…

Lenders will restrict the products they offer. Plus, you may have to pay a higher interest rate to get access to the features you want.

That’s assuming that you can even access a loan in the first place.

The good news is that there are a few things that you can do to improve your credit score. You just need a strategy and a little patience. Here are some tips:

  • Find out where you stand before you apply for a loan. A credit score company, such as Experian, can provide you with a full report. Don’t waste time on a loan application if your score isn’t good enough. In fact, applying with a bad credit score could lead to you getting a black mark on your report.
  • Pay off any small debts as quickly as possible. This scratches them from your credit report and improves your serviceability.
  • For larger debts, ensure that you’re making payments on time and in full. If possible, try to overpay to clear those debts faster. With this tactic, you’re building a clear track record of on-time repayments that lenders will take into account.
  • Remember that people make mistakes. Your credit report may actually contain erroneous judgements against you. Read through it carefully and contest anything that you don’t agree with. Getting errors scratched off the report gives your credit score an immediate boost.

The goal here is to show that you’re a reliable borrower. Every lender uses a different formula to determine the importance of your credit score. Avoid giving them the opportunity to offer you a rate that’s higher than you should have.

 

Tip #4 – You Don’t Have to Stay Loyal

Staying loyal to an existing lender can help you to get access to lower interest rates.

Or, it could leave you stuck on a loan that has a higher rate than you should have to pay. 

If you want a lower rate, negotiate with your current lender. If you’ve got a good track record of making on-time repayments over several years, they should offer a better rate.

Again, you might consider involving a broker at this stage.

If they won’t offer a better rate, make it clear that you’re going to look elsewhere. This may force their hand. And if it doesn’t, you’re likely going to find a better rate with another lender, assuming you have that solid track record.

Wealth for Life effect of the interest rate
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

 

Get the Interest Rate That Suits Your Circumstances

The interest rate that a lender offers isn’t always the best one that you can access.

You can often negotiate for a better rate. Plus, you need to look at the full range of products on the table before making an offer.

This is where a good mortgage broker can help.

Wealth for Life can provide you with access to mortgage specialists who can help with your search. 

Contact the team to find out more.

Whether you’re an investor or an owner-occupier, home loan interest rates can really sting. Here are four tips to help you get a lower rate for your loan.

Let’s say that you’re a budding investor.

You want to get an investment loan for the first property that you’ll add to your portfolio. You look through a few products and see the same thing.

Wealth for Life lender options
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

The interest rate is so high that it’ll have a severe effect on your cash flow. At worst, it could lead to you having to pay money out of own pocket to maintain the property.

Owner-occupiers don’t have it much better. Your income can only stretch so far. After all of the bills and everyday expenses that you deal with, can you really afford to pay huge amounts of interest?

The simple fact is that the interest rate you get for your home loan has a huge effect on your life. Owner-occupiers can find themselves with far less money in their pockets. And investors may find that they can’t build their portfolios as quickly if they have a high rate.

But there may be a light at the end of the tunnel.

In June 2019, the Reserve Bank of Australia made the decision to drop the cash rate to 1.25%.

That’s important for you as a borrower. The cash rate affects the interest rate that lenders offer on their home loan products.

This one change may leave the door open for you to negotiate a lower rate for your loan.

But don’t rely on the lower cash rate alone. Use these four tips to secure the lowest interest rate possible.

 

Tip #1 – Use a Broker to Negotiate on Your Behalf

Think about all of the home loan products that you have access to.

Every major bank offers several that may suit your circumstances. On top of that, you have dozens of smaller lenders who may be able to offer something that suits you.

Wealth for Life Mortgage Broker
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

That could mean you have to sift through hundreds of home loans. Each one has different features and interest rates attached to it.

You’ll have to do a lot of work to understand them all. It could take weeks to figure out which is the best one for you. And that’s time that you probably don’t have, especially if you have a full-time job and a family.

The work could grind you down to the point where you accept a loan just to get it over and done with.

That’s the mistake that so many make.

Usually, this loan won’t be the best one that you can find. And that means you’re going to pay more interest than you should.

This is where a mortgage broker can help.

Brokers specialise in doing all of the legwork that you don’t have the time to do. Plus, they usually have pre-existing relationships with lenders. This means they already understand their best offers.

A good broker can save you enormous amounts of time while finding you the best possible loan. They also know how far they can negotiate an interest rate down until they hit a lender’s breaking point.

 

Tip #2 – Don’t Assume the Lender’s Giving You the Best Deal

Let’s say that you’ve spent the time on research.

You’ve sifted through tons of loan products and figured out which is the best one for you.

Wealth for Life lender interest
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

That’s as good as you can do, right? You’ll have to wait a while before you can try to find a better loan product.

Not necessarily.

The truth is that most lenders won’t offer you their best possible interest rates. They’re in this to make money ahead of serving your best interests. That means they’ll offer the best rate they can get away with.

That’s exactly what Damian Simmons discovered with Wealth for Life:

The owner of two investment properties, Damian Simmons came to us because he felt his bank wasn’t giving him their best offer.

He was right!

Damian had two investment loans, each with an interest rate of 5.03%.

We advised him to switch lenders. His new loans had rates of 4.09% and 4.28% respectively.

The end result was a $7,345.20 saving per year.

Assumptions are a dangerous thing when you’re trying to borrow money. Every lender has their own motives in the loans that they offer.

Again, a mortgage broker can help you to sift through the offers. Plus, they may be able to give you access to loans that you wouldn’t find out about on your own.

 

Tip #3 – Give Your Credit Score a Boost

Your credit score has a huge influence on what you can do financially.

If you have a great credit score, lenders see you as less of a risk. This means you get access to more home loan products. Plus, you’ll likely pay less interest on the loan.

Wealth for Life credit score
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

But if you have a bad credit score…

Lenders will restrict the products they offer. Plus, you may have to pay a higher interest rate to get access to the features you want.

That’s assuming that you can even access a loan in the first place.

The good news is that there are a few things that you can do to improve your credit score. You just need a strategy and a little patience. Here are some tips:

  • Find out where you stand before you apply for a loan. A credit score company, such as Experian, can provide you with a full report. Don’t waste time on a loan application if your score isn’t good enough. In fact, applying with a bad credit score could lead to you getting a black mark on your report.
  • Pay off any small debts as quickly as possible. This scratches them from your credit report and improves your serviceability.
  • For larger debts, ensure that you’re making payments on time and in full. If possible, try to overpay to clear those debts faster. With this tactic, you’re building a clear track record of on-time repayments that lenders will take into account.
  • Remember that people make mistakes. Your credit report may actually contain erroneous judgements against you. Read through it carefully and contest anything that you don’t agree with. Getting errors scratched off the report gives your credit score an immediate boost.

The goal here is to show that you’re a reliable borrower. Every lender uses a different formula to determine the importance of your credit score. Avoid giving them the opportunity to offer you a rate that’s higher than you should have.

 

Tip #4 – You Don’t Have to Stay Loyal

Staying loyal to an existing lender can help you to get access to lower interest rates.

Or, it could leave you stuck on a loan that has a higher rate than you should have to pay. 

If you want a lower rate, negotiate with your current lender. If you’ve got a good track record of making on-time repayments over several years, they should offer a better rate.

Again, you might consider involving a broker at this stage.

If they won’t offer a better rate, make it clear that you’re going to look elsewhere. This may force their hand. And if it doesn’t, you’re likely going to find a better rate with another lender, assuming you have that solid track record.

Wealth for Life effect of the interest rate
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

 

Get the Interest Rate That Suits Your Circumstances

The interest rate that a lender offers isn’t always the best one that you can access.

You can often negotiate for a better rate. Plus, you need to look at the full range of products on the table before making an offer.

This is where a good mortgage broker can help.

Wealth for Life can provide you with access to mortgage specialists who can help with your search. 

Contact the team to find out more.

Pin It on Pinterest

Share This

Share This

Share this post with your friends!

X