March 25, 2013
Have you found your dream property and are now in the position to hunt for the right home loan for you? If so, before deciding to put all your eggs in the one lender’s basket, it is a good idea to consider a range of loan and lender options.
Despite there being a vast range of lenders and loan products in the market, many Australians base their lender choice on an existing relationship. This is supported by our most recent first homebuyer research, which found that 22% of first time buyers who are looking to purchase before September 2014 will base their lender choice on the fact that they currently have their everyday banking account with them*.
By choosing a home loan lender based on banking history, borrowers could be selling themselves short when it comes to finding the best home loan deal for them. There are plenty of times when lesser-known lenders, that may not be top of mind for everyday banking needs, offer a superior home loan deal.
Borrowers could be missing out on a more affordable loan that has features better suited to them. When settling on a home loan it is important to determine if the lender’s offering is competitive. A professional mortgage broker can help borrowers compare loans from a wide range of lenders based on the loans’ interest rate, fees, features, flexibility, and the lenders’ customer service performance. Good mortgage brokers will also highlight any rate discounts and special offers that may be available.
While putting all your eggs in the one basket and getting a home loan with the lender you already have an account or loan with may be an easy option, it is not always in your best interest. Given the wide range of lenders and loan options on offer, borrowers should be shopping around!
Mortgage Choice in Greensborough offers its top tips for comparing lenders and their loan offers:
- How competitive are the lender’s interest rates? Research if the lender has cut their home loan rates in-line with the Reserve Bank’s recent rate moves. Compare their rates to other lenders’ offerings.
- Do their fees add up? Ask your 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.).
- Do they offer the features you need? Check that the lender offers a loan with reasonably priced features that will benefit you today and tomorrow (eg. offset account, redraw facility, etc.)
- How accessible is the lender? If online chat, phone support or branch access on weekends is high on your list of priorities, investigate whether the lender, or an alternative lender, offers such facilities.
- Can the lender meet your changing needs? Explore your options further to know if the lender offers 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).
* The Mortgage Choice 2012 Future First Homebuyer Survey of 1,000 Australians who had plan to purchase their first home in the next two years ran online in September 2012.