Press releases
Lenders in the mood to talk – for now
25/10/2011
Increased competition between lenders, access to cheaper funds and a drop in overall lending volumes mean now is an ideal time for borrowers to negotiate with lenders – but not for long.
Smartline Personal Mortgage Advisers Managing Director Chris Acret says this competition and ability to negotiate means the discounts currently on offer are well worth investigating.
“First homebuyers are likely to benefit from lower interest rates and discounts on application fees, while investors and existing borrowers would do well to speak with their lenders to renegotiate rates,” Mr Acret said.
“Borrowers looking to finance a renovation or consolidate debt can also take advantage of these specials and lenders’ willingness to negotiate. “Likewise, if you’re not satisfied with your current lender, then now may be the time to shop around and investigate other opportunities.
“As an added incentive for borrowers considering refinancing, some lenders are offering to cover the cost to switch.”
Mr Acret said that depending on personal circumstances and requirements, most discounts were tiered – meaning the more you borrow, the bigger the discounts.
“However, that doesn’t mean that you should ‘over reach’ on your borrowings for the sake of a lower rate and potentially put your financial security at risk,” he said.
“Interest rates are constantly in a state of flux and while they’re presently quite low, it’s important to take potential future rate increases into account.
“Even though the lenders are willing to talk and the rate offers appear competitive, you may actually be better off postponing a proposed purchase to fully investigate the property market or save more deposit.
“Regardless, it’s always worthwhile to investigate opportunities – and your mortgage adviser can do all the legwork on your behalf.”
To borrowers who might have put their property purchasing plans on hold in recent times, Mr Acret suggests revisiting plans in light of lenders’ interest in securing your business.
“Take a good look at your financial position and if you are ready to proceed then now is a good time to put your plans into action as these savings won’t continue for much longer,” he said.
Mr Acret said borrowers had more chance of negotiating a better deal with lenders if they had their “financial house in order”.
“If you’re serious about negotiating with your lender, it’s important to demonstrate a good financial track-record, which will include things like having a savings plan, being up-to-date on bill payments and that you’ve resisted signing up for additional debt,” he said.
“This is increasingly important as more and more of your repayment history is being recorded on your personal credit file which is carefully scrutinised by lenders.
“Lenders look at the credit limit on your credit cards as a liability you may have in the future, even if you don’t currently owe a cent.”
Mr Acret said that regardless of your personal situation, now was a good time to speak with your Smartline Personal Mortgage Adviser to review your lending and negotiate the best deals on your behalf.
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