Only a small proportion of home buyers are getting the best deal on their loans after failing to ask for a better deal, new research has revealed.
Would-be home buyers could miss out on getting a better deal on their mortgage in the busy Christmas selling period, Getcreditscore.com.au has warned.
Research from the group indicates just 16 per cent of Australians ask their financial institution for a lower rate when applying for a property loan – with CEO Luke Keller noting that as auction numbers steepen in the weeks approaching Christmas, buyers should be looking at where they stand.
“The seasonal increase in auctions as we approach Christmas means it’s an opportune time for those looking to buy to be negotiating on their rate with their lender,” he said. “Negotiating can be a delicate process, but one of the most important tips is to know where you stand before you begin. That’s why we are urging Australians to look at their credit score before applying.”
It’s important for buyers to “shop around” for the best home loan, he said, but cautioned against applying for multiple loans.
“Applying for multiple loans may be detrimental to your credit score and may limit your ability to borrow,” he said.
In addition to simply being confident enough to ask for a better deal, Mr Keller offered four tips to ensure buyers get the best deal from a rate negotiation.
- Ensure you keep your finances in order and pay bills on time – having a really strong track record is one of the best ways to show a lender that you’ll be a reliable customer
- Check your credit score – knowing your credit score will give you an idea of how a lender views you. If you have an average score, you may need to work on improving it before asking for a better deal, but if you have a good score, you should feel empowered and confident to ask
- Be loyal – loyalty is a factor lenders consider when applying interest rates. If you’ve been a reliable customer for a long period of time, it’s more likely you’ll get a better rate
- Do your research – ensure you know what lenders look for in a reliable customer