May 01, 2016
Finding products and services online has changed the way people make choices as to who they will rather use or buy products from.
And the technology is creeping into the world of finance and home loans to the extent that there has been a marked increase in advertising for home loans from online home loan web-sites.
Typically, these web-sites attract potential you with catchy headline offers such as, “Save with our lowest ever rate! Hurry, rates this low won't last”, or “In less than a minute, you can find out if you prequalify for a home loan”.
Are these online home loan web-sites any good?
First up, searching through multiple online home loan web-sites is a head-spinning process in itself. All you need to do is to enter “online home loans” in any web-search application, and you will be presented with hundreds of options.
Most consumers find that clicking through even 3 or 4 such web-sites is enough to get their head spinning, with the presentation of multiple options, accompanied by a variety of disclaimers and conditions placed on the available options.
Assuming that you get your head around to selecting a particular home loan that catches your fancy, you are then presented with an option to either request a call-back or to enter your personal details online.
Either way, you are now going down the path of voluntarily giving your personal & confidential details to a company or person that you do not even know.
Another tool provided by most online home loan web-sites is their “borrowing power calculator”.
Unless your personal financial situation is fairly simple (e.g. single applicant, employed full-time, in the same job for more than 12 months, negligible credit card debts, no dependants, strong savings record), most of these calculators do not have the capability to give you an accurate estimate of your borrowing capacity.
And the result provided could either be significantly inflated (if the home loan provider does not accept certain types of income) or else even deflated (if the home loan provider chooses to ignore certain types of credit card debts).
The last point raises a third area of potential gap where online home loan web-sites are unable to provide a ‘tick-and-flick’ answer. All home loan providers (whether these are banks, credit unions, building societies, or independent mortgage providers) are required by Australian law to ensure that Responsible Lending guidelines are adhered to. It is their legal requirement to ascertain and verify a consumer’s financial situation, and assess whether the home loan being provided is not unsuitable for the consumer.
So even under the circumstances where the online home loan web-site gives you a “Congratulations! You qualify for this extremely low-rate special offer” message, there is very little relevance of this confirmation until you actually go through the entire process of getting your home loan application submitted for assessment by the lender’s credit assessment team.
Using a mortgage broker
So this brings you back to the other alternative of talking to a real person, by using a qualified mortgage broker who specialises in home loans to assist you in finding a suitable home loan that best meets your requirements.
Mortgage brokers help you find out about suitable loans or credit packages and arrange special deals that are specific to your circumstances. It is their responsibility to provide you with relevant information that will ensure that the loan is suitable and competitive – and that you do not end up paying more than you need to.
They can offer you a variety of home loan options, which will actually match your personal situation with the credit requirements of the home loan provider. The mortgage broker does all the leg work for you by negotiating with banks, credit unions and other credit providers on your behalf to arrange loans. And they will work closely with you all the way to manage the paperwork and process right through to settlement.
If you are still looking for another reason to use a mortgage broker … under current Australian law, a mortgage broker must have a credit licence or an authorisation from a credit licensee to engage in credit activities. This requirement in itself means that you are dealing with a qualified and accredited individual, who has been trained and approved to deal in mortgage applications.
To speak to us call 8342 5866 or you can request an appointment by filling out the online form on this page and we will assist and guide you through the process of reviewing your available options.