How can I save money on my mortgage? There are two important ingredients in a home loan negotiation. Your credit rating. The better the credit rating, the better the loan terms. Home loan, Everything is negotiable.
Simple Loans explains more about these three important ingredients for a successful loan negotiation. Initially, we talk about the credit rating.
1. Your credit rating
Before you take out a mortgage, do a credit check on yourself. This gives you a clear overview of your credit rating. At minuc.se you can easily access your personal information. The first time you order a credit report, the service is free. You can avail the offer once a year.
The information provides you with information about property holdings, payment notes, income, recent credit issues and credits that you do not use and can close. By taking a credit report you can be one step ahead of the banks. If your credit rating is low, it means that you should improve your credit rating to get better loan terms. All banks and lenders take credit information.
It is unlikely that your credit report will be perfect. Simple Loan’s article on “How to increase your credit rating” tells you how to improve your credit rating.
Putting down unsecured loans and saving money will make you more creditworthy. Reduce your expenses, work overtime, sell things you don’t need and save your tax refund. If you pay less than 15% of the cash deposit (which today is not usual for banks to approve), you are considered at risk. If you pay less than 15% in cash, chances are that you will have to pay extra interest for a private loan. Therefore, try to save as much as possible for a cash deposit and reduce the risks for the bank which gives you a much better condition.
Data shall remain with UC during the following time period:
- 3 years for payment remarks
- 5 years for debt restructuring
- 2 years for credit card abuse. Valid from the date the card is canceled.
- 1 year for requesting or disclosing credit information.
2. The home loan
There are some mortgage comparison services that can give you an idea of the general interest rate. However, each mortgage is unique based on the home, your conditions and assets. The only way you can know what your interest rate will be is to negotiate. Talk to at least 5 lenders and read about interest rates. Compare the cut rates. Knowledge is power. Always be one step ahead of the bank.
Interest rates are usually the heaviest expense. The interest rates are always profitable to review and try to get down. Unfortunately, it is quite difficult to negotiate the interest rate at the bank you already have. We can only say that you profit from being unfaithful to your bank. Or at least threaten to take out a loan at another bank to lower your mortgage rates. Be a bit cumbersome and demanding. And last but not least. The bank should thank you, not the other way around.
If you have a personal contact at a bank that you have known for a long time, the negotiations always work best there. They have confidence in you and feel more secure in giving you a good interest rate. Should you meet someone in person at a bank, put on a suit. People always have a better attitude towards people who are similar to themselves.
One risk trap that many people end up in is that they buy an overpriced home. The housing is largely a fixed cost. It is difficult to influence, especially in the short term. Avoid, from the beginning, that you incur housing costs that you do not really manage. Interest rates and electricity prices go up. Right now we have a very low interest rate position that is predicted to go up.
The banks’ interest lies in selling money
They have an interest in making money from you by borrowing a lot of money. But just like in the shoe store, it is ultimately up to you to decide. Not the shoe store or the bank official. Can you really afford these shoes? Will you like them and are they worth their price? Where do you want to live, how much can and do you want to pay? Do you get value for money?
Keeping track of your circumstances and what you can afford is always important because a home purchase means big money. The interesting thing is how much the expenditure gets per month.