Imagine for a moment that you’re just about to apply for a home loan from your local bank. You meet their requirements and your application ticks all of the right boxes (thanks to your helpful mortgage broker guiding your hand!), but then you hear something quite unappealing. Another individual in the exact same position as you has applied for a mortgage, only to enjoy a lower rate.
Why could this be? What makes this person so special – and why is your lender seemingly favouring them above you?
At The Mortgage Calculator we understand just how irritating this can be, in fact we’re often contacted by applicants that need our help as they’re facing higher terms than others. Although most banks will try to remain fair in their decisions, it’s not unheard of for some people to benefit from cheaper deals than others.
One particular category of applicants are commonly referred to as repeat applicants. We’re not talking about those that are rejected for their applications time and time again; as if anything, most banks will draw a line and no longer accept submissions from these individuals. We’re referring to those that approach the bank for repeat home loans.
What Makes a Repeat Applicant?
The simplest way of understanding what a repeat applicant is, is by referring to them as something else entirely. Within the financial industry these individuals are commonly referred to as repeat, or consistent, customers. They are often property developers, but can also be home investors – who buy a house using a mortgage loan, sell it on for profit, borrow more cash, buy another home and so on and so forth.
If an individual uses a bank for the majority of their large-scale transactions, then it’s not uncommon for some lenders to extend exclusive deals to them. These can take shape via reduced interest rates, or they can also feature fairer repayment terms. Comparing yourself to these individuals as a first time buyer would be similar to comparing an employee that enjoys a discount to a regular customer.
Now, here’s where things get really interesting. Although some banks extend discounts for their ‘special customers’, it’s not unheard of for a good mortgage broker to be able to negotiate terms that are similar, or the same as these fairer alternatives. Just imagine that – being able to reap the reward of a ‘loyal’ customer, without having to spend tens of thousands to join the club. That’s pretty appealing, if you ask us.