Finding The Perfect Mortgage Rates Is Easier Than You Think! 

Yes it’s true, mortgage rates are very easy to manipulate when you are using leverage against different mortgage lenders using the broker for all they are worth. I sit comfortably with an online loan calculator for about 20 minutes trying to see what installments can I afford to pay monthly and how to optimize the loan for my investment purposes.

When I was a junior property investor I was very loyal to the bank that gave me my varsity loan and car loan. Now I know different and have left that naivety way behind. 

Initially I could barely fathom working into another bank and making a mortgage loan request with my stipulations. That misplaced loyalty only lasted until my bank almost destroyed a property deal I had secured when out of the blue they pulled out my financing which I could afford at the last minute. 

That act of cowardice nearly costing me a very lucrative deal. The bank had very good reason to pull out because the developer was not very organized and the bank was very concerned. I was very green and I did not care about the risk because I had faith. 

The developer went ahead with my uninformed permission to another competing bank and organized a loan for me at higher mortgage rates than I would have liked. The whole deal did not go smoothly but I had a contract to buy two buildings and I was greedy. I wanted both to go through so I tagged along when this guy added more financial strain than I would have liked. 

I was not in a position to negotiate and I totally messed it up. I was deeper in debt than my estimations and I wanted out. I flipped the properties as soon as the windows were fitted. I was mad and I just wanted out. My mistake was not hiring out for another year and selling then. 

That is why when I approach a mortgage broker who goes out to find me a loan I make it a point to stipulate clearly what my mortgage rate will be, what the exact term I want and how much deposit I want to use.

After sitting with a mortgage payment calculator to figure out the exact loan installment I want to pay per month I use the calculations as a bargaining point to negotiate with. In South Africa we tend to accept the selling price which is not so much in other countries. 

I had a recent deal where I asked for a prime minus 2.5% interest rate and a long term loan of 30 years. I didn’t get 2.5% but I got 1.75% and 30 year 110% loan of the purchase price. I wanted to rent it out for a long time and to add some amenities such as automatic garage doors, security bars and paving the outside.

The best thing is the tax deductions that I get are predominantly from the mortgage loan interest I pay monthly with the help of my happy tenants. At this point a 30 year loan term means that for the first 10 years my installments are 95% interest and it’s like printing money.

Happy printing y’all!