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Negotiating your loan
The negotiation period is the time to ask all your questions
including:
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How much can I borrow?
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Will I need mortgage insurance?
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What is the minimum monthly payment on your lowest-interest-rate
loan?
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Do you have a loan with the features I need?
If you find a suitable loan, the institution should give you a
detailed breakdown of the costs - everything form application fees
(sometimes refunded) to establishment fees, the cost of any valuations
(and who pays), administration charges and early-termination penalties.
All proposed fees and charges should be in writing. Make sure you
understand them all before signing the agreement. Many institutions
may not have much room to move on interest rates but they may negotiate
operating fees.
Once you decide on your course of action, ask how much your loan
will cost and how long it will take to pay off. Many institution
s have computer software presenting loan-progress scenarios based
on various repayment schedules. Make sure the projections include
fees and charges as well as the total interest to be paid over the
life of the loan.
The more research you've done on the different mortgage deals available
the better. If you know and understand what's on offer you can negotiate
with confidence. Always ask if the institution can make the deal
a little better - the worst that can happen is they'll tell you
it's the best deal they have.
Again, when you compare mortgages consider more than jus the interest
rate. The right package for your circumstances should help you be
debt-free sooner.
You can leverage your existing relationship with the institution.
Remind them of your custom. If you need other products, say a business
account or credit cards, tell the institution you are willing to
bring all your custom to them if the terms are right.
Did you know…
Ask for a sample copy of a mortgage contract. If there are unacceptable
clauses then seeing it early will save you from completing an application
form for nothing.
Other information in this guide:
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