In March 2016, the Roy Morgan Consumer Banking Satisfaction Report revealed that the satisfaction level of the customers of the Big 4 banks in Australia declined to 80% from 80.6% in February 2016.
It also pointed that the satisfaction level of the home loan customers of the Big 4 banks remained below 80% in the 6 months to March 2016.
There is no doubt that loyalty to the Big 4 is costing home buyers not only in terms of money due to higher interest rates but also in terms of customer experience. The smaller banks, on the other hand, are giving the Big 4 a run for their money. From competitive home loan rates to better customer service to professional home loan packages, there are several small lenders in the market who are willing to provide home buyers highly competitive deals to break into the property market.
But how do you tell a genuine lender from an unscrupulous one? As the mortgage market turns highly competitive, is it possible for you to choose a mortgage lender from the milieu for a tailored home loan deal?
From the Big 4 to online only lenders to credit unions, mutual societies and building societies, the options are galore. Here are 5 tips to finding a mortgage lender that fits your bill:
1. Search online – Comparing home loans online is a great starting point for finding the right mortgage lender for your requirement. It also makes sense to compare customer reviews of several lenders and compare the extra services provided by them, as your relationship with your lender will potentially last more than a decade (considering the term of your home loan), and apart from a competitive interest rate, good customer service is imperative.
Do you know these essential features you need in a home loan?
2. Ask the right questions – When you contact a potential lender, ask the right questions to understand what you are getting into. The lender must explain to you their borrowing criteria, whether you are eligible for a home loan, the procedure and the documentation required for applying for a home loan, the fees and other costs involved.
Is the lender approachable? Do they patiently answer your questions and return your calls? Remember, you will need to communicate with your lender several times during the life of your loan and if they are not listening now, they might not later.
3. Contact your bank – Contacting your bank you have been dealing with for years can also be a good starting point to find the right home loan deal. Considering the competitive landscape of the mortgage market, lenders offer several discounts to retain their customers and having an existing rapport with the bank obviously helps. However, all banks do not specialise in all kinds of home loans and convenience should never be chosen over the features you need in your home loan.
3. Ask an agent – While it is advisable to start looking for lenders before you go hunting for properties, your local real estate agent can refer you to local banks and lenders who are popular in your neighbourhood. Often real estate agents are aware of deals being offered by the local banks or can refer you to expert mortgage brokers to help you in financing your home.
4. Use a mortgage broker – Mortgage brokers have successfully taken out the pain from financing for many home buyers.
A survey by Mortgage and Finance Association of Australia revealed that 92% of the participants were ‘very’ or ‘fairly’ satisfied arranging their mortgage through a broker. 44% of the participants said they were likely to recommend their broker to family and friends.
An experienced mortgage broker can not only guide you to the right lender that offers products tailored to your requirement but also has access to deals and rates banks don’t usually advertise. Read here to know how a mortgage broker can speed up the process of financing and maximise your savings.
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“First time home buyers are often hesitant of borrowing from small banks, but a cut of even few points on your home loan can save you several thousand dollars! If you are looking to pay less in monthly repayments, the credit unions and co-operatives have some great deals on offer. Compare home loans online and take financial advice to make an educated decision,” says [Collins Mayaki], a mortgage broker with HashChing. He advises all buyers to thoroughly read the fine print before signing the dotted line for their home loan.
HashChing brings to you a panel of verified mortgage brokers and these experts are happy to answer your home loan questions online, free of cost. You can also compare broker pre-negotiated home loan deals online.
By Vidhu Bajaj