Negotiating a first home loan

Discussion in 'Loans & Mortgage Brokers' started by Markomire, 8th Aug, 2019.

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  1. Markomire

    Markomire Member

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    Hi all,

    I just got a pre-approval from CBA for my first home with an off-set account and was wondering if it's worth taking this to another bank and use this to negotiate a better deal?

    For example, maybe negotiating for a better borrowing capacity (that I can afford to pay back), better rate, waiving annual fees etc... just not sure if I am missing anything else that I can easily negotiate to my advantage for a first home loan?

    Would it be a smart thing to get the banks to compete for my business this way?

    I can only borrow from either CBA or Westpac due to my visa restrictions.

    This is what CBA pre-approved:
    Loan amount* $477,500.00
    Loan type Standard Variable Rate Home Loan
    Initial annual percentage rate* 3.46% p.a.
    (Based on current interest rates which are subject to change)
    Initial monthly repayment* Principal and interest repayments of $2,135.00
    Loan term 30 year(s)


    Any advice would be appreciated!

    Thanks

    Mark
     
  2. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Lenders base the rate on a number of factors, including loan amount, and Loan to value ratio.

    You may be able to negotiate another 0.05% on that.

    Perhaps consider fixing part of the loan if you'd like lower rate.

    I don't follow how else you'd have the banks competing?

    2 lender choices isn't that many given that's all what you are limited to.

    It's about borrowing right now vs waiting to have the relevant Visa so you have more choices.
     
  3. sumterrence

    sumterrence Well-Known Member

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    Your borrowing capacity should be very similar between the two, it would be alarming if one can give you a borrowing capacity substantially more than the other.

    First home buyers usually get a really nice fixed rates as well which most big4s offer very similarly too.
     
  4. Morgs

    Morgs Well-Known Member Business Member

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    You're going to destroy your credit file if you put multiple applications in with multiple lenders.
     
  5. Markomire

    Markomire Member

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    What is an example of how it will impact my credit file? Say I put in 3 different applications, will banks suddenly borrow less to me?
     
  6. Markomire

    Markomire Member

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    Thanks for your answer.
    I'm on a partner visa 820, waiting to get 801. Do you know of any other banks that will lend in my visa situation? I'm the only income earner and partner does not have any income.
     
  7. Morgs

    Morgs Well-Known Member Business Member

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    Credit scores | ASIC's MoneySmart

    In practical terms if you end up doing the same with car loans, personal loans, credit cards all of a sudden you'll start getting rejections upon application due to too many queries.
     
  8. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Its been a while since I checked but from memory there may be a couple of others who may offer this.

    Policies change all the time, so will need to check.

    Whether borrowing capacity is more with one or the other, will just depend on individual lenders. Now with latest changes in how lenders calculate borrowing capacity it will just depend on things like the rate they are offering.

    Another variability tends to be living expenses... if your living expenses are lower than the lender's, the lender overrides the expenses. The minimum varies lender to lender.

    At times maximising borrowing capacity may not equate to the most competitive rate... but then again, everyone's circumstances are different.

    Also as mentioned, don't fry your credit file it will impact your credit score and what you can do.

    Best work with a broker, so you can make an informed decision.