Why Do Consumers Get Different Deals on the Same Mortgage or Insurance Packages?
Have you ever realized that banks and other financial institutions tend to offer different deals on the same mortgage and insurance packages? For instance, a bank may lend a mortgage worth 3 million pounds to two different clients at varying interest rates such that client A gets an interest rate of 2% and B 4%. You might wonder why these institutions do that. Is it bias or could there be a collusion between lenders and some clients? Not at all. As it turns out, many factors come into play in determining the interest rates to give different clients that take the same mortgage. Below are some of those factors:
- First Time Borrower
Lenders see first time borrowers in two ways; either as potential great customers who will repay a loan perfectly in time or vice versa. There is no way for them to tell what type of customer you are if you are borrowing for the first time. So, to offset the risk they will take to give you a mortgage they will demand a higher interest rate in return. Good news is Get Me My Mortgage can help negotiate a reasonable interest rate on a mortgage for a first time borrower.
- Credit Score
Having a great credit score makes you a favorite client for many lenders. However, having a poor credit score locks you out of numerous mortgages or insurance opportunities. Even if you are lucky to find a lender who is willing to take the risk to give you a mortgage or insurance coverage, you will have to accept a higher interest rate. After all, you do not have much choice. The best thing is To Get Me My Mortgage can help negotiate a reasonable interest rate on a bad credit score mortgage.
- The Negotiation Skills of the Broker You Pick
The type of mortgage broker you choose can get you a better or worse deal. Many borrowers have had to pay higher interest rates than others simply because they chose mortgage brokers who did not negotiate well enough to get the best interest rates. At Get Me My Mortgage, we take pride in having great negotiation skills that will get you the most reasonable rates.
- Mortgage Duration
Another factor that determines mortgage and insurance deals is the repayment period. For instance, short-term mortgages or insurance contracts that last 10 years or less, generally come with a lower interest rate and a higher monthly payment. On the other hand, long-term loans that last beyond 10 years have a higher interest rate and a lower MP
I hope now you understand some of the reasons why consumers will get different deals on the same mortgage or insurance products. It is not because lenders are biased or colluding with some borrowers. It’s because of certain factors like whether someone is a first time or regular borrower, credit score, the negotiation skills of a mortgage or insurance broker, and the repayment period of the mortgage or insurance. Have any other questions related to mortgage and insurance? Feel free to contact Get Me My Mortgage for assistance.
Press Release Distributed by The Express Wire
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