Do This for a Better Interest Rate
Times are tough. School’s back, the kids need new clothes and equipment for their sporting hobbies, and the interest rate on your mortgage has just increased – again! An interest rate rise is an all-too-familiar occurrence for many American homeowners, and is probably one of the most unwelcome snippets of news you can receive. Don’t despair though. Your rates have increased, but there are ways to ensure you’re getting the best possible deal and scoring a better interest rate; and they’re easier than you think.
Just like you’d shop around for that new pair of shoes or a replacement for your favorite set of Oakley’s, there’s nothing preventing you from doing the same with your interest rate. Do some research online or head to your local bank branch to see what they have to offer. Many banks will have special rates to encourage sales (especially in market downturns), just like a retail store. Consider at least three loan providers before making a final decision and avoid being sucked in to a deal without considering the repercussions. Be sure to check for any hidden fees like break of contract, early exit, transfer of mortgage, etc. These could outweigh any potential benefit you receive from the exercise.
See a Mortgage Broker
Sometimes being in the know gives you perks and exclusive deals that normal people can’t access, and that’s exactly what a mortgage broker can offer. A mortgage broker has agreements with a specific list of lenders and can have the first choice of new products, services, and interest rate preferences for continued business. Despite being the middle men in the deal, mortgage brokers receive commissions from the bank rather than you, and they don’t get paid unless you get a loan. They’re more likely to find something that suits your needs rather than just outright selling you a product, so you have a better chance of a better deal.
Utilize Buying Power
Maybe you’re a budding Donald Trump with multiple investment properties in your portfolio. If so, here’s an excellent opportunity to use the power of numbers and flex your buying power muscle. If you’ve got multiple loans with one lender, make a point of highlighting the amount of business you have and see if they’re willing to come to the table with a better deal. If you’re spread across multiple lenders, consider consolidation as a means to obtain a better interest rate. In all cases, be sure to consult a professional before you make a decision to ensure there are no negative tax repercussions.
Don’t be Afraid to Ask
A much forgotten and extremely effective way to get a better interest rate is to simply ask for one. On some occasions, the bank may have updated their policies and products and conveniently forgotten to inform you. Sometimes, these internal product swaps come at no additional cost to you and can lead to big savings. Always remember that banks are in the game to make money, so they won’t always be willing to advertise options that lower their bottom line. Most of the time, a teller or mortgage consultant will be willing to discuss ways to keep your business with them, so you can quite often receive a better interest rate, especially if you come in with some prior research on comparison rates. As the age old saying goes: It costs nothing to ask!
If finances are tight, or even if they aren’t, getting a better interest rate for your mortgage can only benefit your hip pocket. Remember, nothing in life is permanent, so don’t be afraid to explore your options and shop around for an interest rate that can potentially save you big money over the life of a loan. As always, be sure to consult a professional before signing up for a deal, just to be sure you’ve got all your bases covered.