Picture this: You've just engaged in an emotionally draining stalemate with your toddler over the last cookie, and you're not sure you have the stamina for another negotiation. But what if we told you that unlike negotiating with a three-year-old, negotiating your home loan rate with your existing bank could save you thousands?
Below is a step-by-step guide to ensure that even if you lose the battle at daycare, you can win the war against high mortgage rates!
No New Frenemies: Your bank already knows you and your credit history better than your toddler knows their favourite cartoon theme song. This can work to your advantage when asking for better loan terms.
Less Paperwork, More Playtime: Since the bank already has your details, the process is as streamlined as getting your child to eat veggies—well, almost.
No Hidden Tantrums: You might be spared the hidden fees that switching to a new lender might unleash, like a sudden tantrum from your toddler when you least expect it.
Step 1: Homework Before Playtime
Before marching into your bank, take time to research other lenders' rates. The same way you compare playdate venues, compare bank offerings so you can present a strong case to your current bank.
Step 2: Playing the Loyalty Card
When you finally speak to your bank, highlight your loyalty like you would emphasize your toddler's achievements to the grandparents. The longer you've been with the bank, the better your chances of a favourable negotiation.
Step 3: Check Your Home's "Toy-to-Space" Ratio
In banker's terms, this is your Loan to Value Ratio (LVR). A lower LVR means less risk for the bank, much like fewer toys mean less clutter and tripping hazards at home. The more appealing your LVR, the better the rate you can negotiate.
Be aware that some banks will only budge if you have an offer from another bank, a bit like how your toddler won't eat their veggies unless promised a treat. It's frustrating but knowing this can help you strategize.
Losing a showdown with your toddler might bruise your ego, but a win in the mortgage negotiation arena can be a big ego boost, not to mention a financial win. So put down the parenting books for a sec and pick up those financial statements. Your future self will thank you!
Disclaimer: The opinions expressed in this article are strictly for general informational and entertainment purposes only and should not be taken as financial advice or recommendations.