Five tips for comparing lenders and their loan offers:
1. Compare lender interest rates: Understand what interest rates are being offered by Australia’s lenders at the moment and then compare and contrast them against what else is on the market. While interest rates aren’t everything, your perfect lender should be very competitive on rates.
2. Investigate the associated fees: Many lenders will charge various fees, so make sure the lender you are contemplating partnering with offers competitive fees and charges. Get your mortgage broker to compare how the lender stacks-up in terms of the fees and charges on the loan (eg. for loan features, transactions, late penalties, early repayments, top ups etc.).
3. Consider your features: Before you can find the perfect home loan, you need to understand what loan features you want to have both today and into the future (eg offset account, redraw facility, etc). Once you have established what loan feature/s you require, you can see which lenders offer mortgage products with reasonably priced features.
4. Consider lender support capabilities: If weekend branch access and phone support are high on your priority list, it is important to partner with a lender that offers such facilities.
5. Contemplate future commitments: Before you decide to partner with one lender, investigate whether or not they offer a wide range of loan options to suit you, should your personal or financial situation change (eg. if you need a loan top up, access to funds for renovations or you wish to refinance an existing loan).
“While it may be easier for a borrower to apply for a loan through the lender they already have a relationship with, it is not always the most prudent decision,” she/he said.
“By choosing a home loan lender on banking history alone, borrowers could be selling themselves short when it comes to finding the best home loan deal for them. There are many lenders out there offering mortgage products whose features may be ideally suited to a borrower’s needs. Of course, if they don’t shop around, they will never know what is on the market.”