Securing savings by knowing where to look and what to look for

August 20, 2012
Richard Windeyer

In the wake of the second consecutive monthly ‘on-hold’ cash rate announcement from the Reserve Bank this month, now is the time for borrowers to seek out the best home loan deal.

While the cash rate remains at 3.5% for now, it is anticipated that there will be at least one further rate cut this year. However, there is no certainty about if and when this may occur.

This may be because our economy is starting to show positive momentum; we have recently seen retail sales, housing prices and construction activity rise, while unemployment figures and interest rates remain low, and all of this has contributed to a small but promising rise in consumer confidence.

However, soft inflation figures released this month show the Reserve Bank still has room to move should our domestic economy lose balance or the situation in Europe worsen.

In this climate of uncertainty, there may be more room than many borrowers expect to secure savings.

Borrowers would benefit from keeping mind that interest rates are only one part of the home loan picture – there is more that can be done to help locals repay their home loan sooner, as long as they know where to look and what to look for.

Before deciding to take the popular DIY route and deal with lenders directly in the hope of getting a better deal, borrowers should consider the benefits of engaging an expert to help.

People who enlisted the help of a professional to find the best home loan suited to them have said that they not only appreciated the time it saved, they also found it less stressful and some were able to get a further discounted rate.

So while the Australian penchant for DIY is alive and well, when it comes to your home loan, there are clear benefits to teaming up with an expert to get the job done right.

Borrowers should start by researching their options, as not all brokers are created equal. Three key questions to consider when selecting a broker:

    1. Does the broker truly act in my best interest? An honest and professional broker should be working to get the best outcome for you, and not the other way around. Question whether they receive the same commission rate regardless of the lender or loan product chosen. The best brokers will be able to clearly outline their service, remuneration and dispute resolution policy before you get started.
    2. Can your broker access a wide range of lenders? Brokers can have up to 20 lenders or more on their panel. If yours doesn’t, it may be time to consider a change. With more to choose from, your chances of accessing a better deal are likely to increase. Look for a broker with a wide range of lenders – big banks, smaller banks, building societies and credit unions – to choose from.
    3. Does your broker charge a fee? Some borrowers may think that a broker fee is part and parcel of the service. But this is not the case. Outside of the normal loan application fees, the service you receive from your broker is not always tied to a fee – check before you sign-on as to whether you will be charged for their service.

For more information contact Richard Windeyer on 1800 01 LOAN or click here to "Book a Meeting"

Posted in: Home loans

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