If you are considering buying property in the near future, while it may seem easy and advantageous to apply for a home loan through the lending institution you currently deal with, this isn’t necessarily the best route to take. This month we suggest :
Shop around before you put all your eggs in one lender’s basket.
Read on for our 5 simple tips for comparing home loans and lenders.
By now, everyone looking at property is well aware that with interest rates hovering around record lows, and Australia’s lenders offering innovative and sharply priced home loans, there are many good reasons to shop around and consider a range of loan and lender options.
It is tempting if you already have an existing relationship with a lender, to simply go into a branch that you are familiar with when ready to apply for a homeloan, and settle for that lender's specific loan products on offer.
However, borrowers should not necessarily put all their eggs in one lender’s basket, just because of this prior relationship.
Currently, many of Australia’s lenders are offering some fantastic borrower incentives, and despite the fact that there are hundreds of loan products on the market, a considerable amount of borrowers will still apply for a loan through their current lending institution.
Borrowers could be selling themselves short when it comes to finding the best home loan deal for them, by choosing a home loan lender on banking history alone.
If borrowers don't shop around , they could very easily miss out on a mortgage product that is ideally suited to their needs, that may not necesarily be available at their current financial institution.
There are many lenders out there offering mortgage products whose features are slightly different, kind of like trying on a pair of jeans. Most jeans look pretty similar hanging on a rack, but until you shop around and try a few on, it's hard to tell which ones will fit you the best.
Similarily in the home loan market!
If borrowers decide not to shop around, they will never know what is on the market, and perhaps end up with an ill fit for their specific lending circumstances and requirements.
Of course, that's where we come in!
A professional mortgage broker can help borrowers compare loans from a wide range of lenders based on:
- the loans’ interest rate,
- flexibility, and
- the lenders’ customer service performance.
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.
This Easter, it is important borrowers don’t put all of their eggs in one lender’s basket, but rather hunt around for a mortgage product that is ideally suited to their needs both now and into the future. The idea of hunting for a homeloan is of course no where near as inviting as hunting for some chocolate, so of course, let us do that hunting for you! You get to just relish in the find, and enjoy your chocolate!
That said, if you are interested in a little bit of hunting for the perfect home loan yourself, Mortgage Choice offers:
Five top 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. (Did we mention that we have software that does exactly this for you, very very quickly?!)
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.Your Mortgage Broker can compare how the lender stacks-up in terms of the fees and charges on the loan for you (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. Our expert knowledge in this area of all the different lender's and their products, again can save you time on this comparison, once you have an idea of what features would suit you.
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. If you are more an internet based banker, then some online lenders with fewer branches offer discounts on some of their fees, as their costs are lower. We can help you compare those too.
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). Some lenders allow you to take Mortgage Holidays, so if you do experience a negative change in circumstances to your financial ability to pay your loan, you can apply to reduce repayments until you get back on your feet. With the amount of redundancies taking effect recently, if you are at all concerned about what the future holds, perhaps this might be a feature to ask your broker about when deciding on your lender.
If you would like to learn more about your home loan options, call us today on 07 3366 9982, email us at firstname.lastname@example.org or visit www.mortgagechoice.com.au/stuart.pullar.
We're here to help you make light work of your hunt!
This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances.
About Mortgage Choice
Mortgage Choice pays its franchisees the same commission rate regardless of which lender the customer chooses as long as it's a residential home loan with one of the 27 lenders on our panel. This ensures the broker is focused on getting the right outcome for the customer.