Negotiate Mortgage Interest Rates by following theses simple steps.
Buying a home is likely to be your most significant financial commitment, so it makes sense to plan and have a strategy that gives you the best chance of success. Most homebuyers negotiate on the sale price of the property they are purchasing, but very few do the same for their mortgage. Follow our seven-step strategy to give you the best opportunity at getting the best rate for your mortgage.
Step 1 – Get Your Credit Score in Tip Top Condition
Demonstrating that you are financially savvy will go a long way to helping you get your mortgage application approved and is likely to give you access to better rates. To find out more about how your credit score can affect your mortgage, take a look here [How Does Your Credit Score Affect Your Mortgage]
Step 2 – Compare Like-for-Like
You need to have a close to an airtight case as possible when approaching a lender to negotiate a mortgage rate. They are likely to ask about quotes you have received from other lenders. These quotes need to be for like-to-like mortgage products. It’s no good comparing an interest-only quote to a tracker quote. Get three or four like-for-like quotes for the type of mortgage that best suits your financial situation.
Step 3 – Set A SMART Goal
Be SPECIFIC in the type of mortgage you want. Which will best suit your needs? How long a term?
MEASURE like for like mortgages to figure out their overall costs, including fees.
Make your plan ACHIEVABLE, consider your credit rating, the amount of your deposit and the length of term you’re looking to borrow over. A lender will say no if they feel you are overreaching yourself.
Be REALISTIC. There are specific fees that are non-negotiable, such as the Valuation fee. Turning down a good mortgage offer because of unrealistic expectations will have you kicking yourself in the future.
TIME won’t be waiting for you, so set a deadline. Mortgage products and rates can change daily. Unfortunately, delaying your decision means you are more likely to see your ideal mortgage disappear off the market.
Don’t get caught out. A lender may agree to more preferential rates, but this might include changes to other elements of the loan terms. Take time to read through every detail and if you’re unsure, get the help of a mortgage broker.
Do you already have a relationship with the lender? Maybe you’ve been banking with them since Auntie Flo set up your bank account all them years ago. Remind your lender of how loyal you have been. It may nudge them into providing a more preferential rate if they can.
If your lender discusses new terms with you on the phone, face-to-face or in a virtual meeting, make sure you get any new agreements in writing. Make notes during any discussion you have, providing a reference point when you receive the revised documentation.
Build a reasonable deposit before starting your hunt for your dream home. The larger your deposit, the better position you will be in to negotiate. Making a 20%+ deposit will likely remove mortgage insurance costs, saving you hundreds over the lifetime of your mortgage.
Negotiating your mortgage rate as well as the sale price of the property you want to purchase is likely to save you thousands of pounds. Still, it takes meticulous planning, a keen eye for detail and plenty of patience. To find out how long it takes to get approved for a mortgage, take a look here – [How Long Does It Take To Get a Mortgage]
Finally, you want to have the confidence and ability to know when you are ready so that you can move quickly and decisively in a fast-changing market. It’s easy to get overwhelmed, which is why working with a mortgage broker can make all the difference. A mortgage broker brings peace of mind, draw your attention to potential problems, guide you to the best mortgage for your specific needs and is likely to save you money. To find out more about how mortgage brokers work, take a look here [How Do Mortgage Brokers Work]
Do you have a question about mortgage negotiation strategy? Leave a message or call one of our qualified Mortgage Brokers on 0800 1 777 333