If you ever lost focus on saving money in the past and found yourself in a position trying to figure out what you've spent it all on, then you'll agree that saving is often much easier said than done. Things like home loans are a great place to start due to the large sums of money involved, but many of us will complain that we don’t have the time to compare loans or cross reference interest rates.
While this may feel like a chore, it's also important to realise that taking the time to dig into this particular aspect of your financial affairs could pay huge dividends. So to help you along, here are our suggested top 5 ways to save money on your home loan.
Tip 1 – Do your Research
On the web there are many websites designed to speed up the process of helping you compare rates, show comparison tables between vendors and much more. Websites such as Mozo allow you to compare a wide variety of options e.g. variable rate loans, full feature, first home, low deposit loans and plenty of others. You may be able to find ways in which you could save hundreds or even thousands of dollars each year by studying these in more detail and comparing to what you currently have.
FYI: Many large banks do not publish their rates on these websites so be sure to check with your branch before going ahead with an online brand for extra due diligence.
Tip 2 – Compare and Compare
You may have already found a great rate and are paying less than the average Joe, so congratulations. But, what you really need to be asking yourself is what additional charges are you vulnerable to as a reuslt of it? Saving 0.02% per year, but having to pay $10 bank charges per month for the privilege may still cost you more in the long run.
Searching online may display more favourable rates from smaller banks but their features may be lacking, so you need to compare whether the extra saving is worth the extra work. All this comparison work can consume your entire Sunday, so what we recommend is putting all the information you have found into a home loan calculator from Finder.
Tip 3 – Negotiation Time
If you are still doubtful or want to push your luck to try and secure an even better deal, then have a chat with your bank manager or broker. You will be surprised how many times these people will have the flexibility within their system to waive a fee or reduce a rate to secure your business. Don’t go into these meetings blind though, make sure you have done your research and know what you are talking about as you could potentially save yourself thousands per year in fees and repayments.
Tip 4 – Be Prepared to Jump Ship
A bank may sometimes be unable to offer you the rate that you are looking for or provide a competitive enough rate to keep you interested in staying with them. There is no loyalty with money and if you can find a better deal elsewhere there is no reason why you shouldn’t take it. If you really want to leave feedback about what you thought about the bank's service or product, then take your business elsewhere. You will be much happier compared to spending hours on the line with customer service staff complaining.
Tip 5 – Relationship Development
If you’ve searched for great rates before then you may have been told the cock and bull story about how rates aren’t necessarily the most important decision factor. What these people will tell you is that service is the most important and that’s because they know their rates suck. You can find great rates with a great service and it doesn’t need to cost you any more. Ultimately, if you can build a good relationship with your lender then they are more likely to give you the best rates purely because you are their best customers. In turn, they hope that they attract your loyalty.
We hope this information helps you in your search for a more favourable home loan and if you have any information that you have found useful in your quest then please share it with the Buckscoop community.