Savvy investors know that when times are tough, sometimes it’s best to sit tight – and sometimes you can play the field to your own advantage.
With increased competition between banks for your business, right now it may be possible to negotiate a better deal on your home loan. If you’ve put your purchasing plans on hold or if you’re unhappy with your current arrangement, now is the time to review your home loan while keeping these three points in mind:
1. Brush up on your haggling skills
As with most purchases, it’s worth asking ‘what can you do for me?’ Lower interest rates and discounted application fees will benefit first-time buyers, while investors and existing borrowers can renegotiate these rates. If you’d like to finance a renovation or consolidate your debt, the banks’ willingness to get your business (such as offering to cover the cost to switch) can mean some serious bargains in your favour.
2. Demonstrate a good track record
You have more chance of negotiating a better loan if you can demonstrate a good financial history. This means having a savings plan, paying your bills on time and not signing up for additional debt via credit cards. Even your credit limit is under scrutiny, as these are regarded by banks as a potential liability in the future.
3. Keep an eye on the future
It’s a fine line between playing the field and getting yourself into too much debt. Bearing in mind your personal financial circumstances, it’s possible to borrow more for a bigger discount (known as ‘tiered’ discounts). While it’s a buyer’s market out there, it’s important to be cautious and keep in mind future interest rate increases before talking to your bank.
Your home or investment loan will be far and away your greatest debt, so it’s worth spending the time to shop around. Increased competition between banks plus your ability to negotiate means the discounts currently on offer are well worth investigating.