Broker-originated home loans reached record highs towards the end of 2020, according to mortgage broker eChoice.
Data commissioned by the Mortgage & Finance Association of Australia and researched by CoreLogic estimated that $57.47 billion of new loans were settled by 18 leading aggregators.
“With great wealth comes great responsibility,” Bill Gates famously quipped. So, how you choose to borrow and from whom depends largely on research, repayment methods, reputation and reliability.
Comprehension is key
You must first understand how mortgages work. Taking out a home loan can seem overwhelming, especially if it’s your first. Talking with friends and relatives will remove some of the mystery. The eChoice website offers more than 50 fact sheets to help you understand the home loan process.
Have the lender come to you
Visiting someone else’s office can be an uncomfortable experience, and takes more time than you’d want. Many institutions — including eChoice, the Commonwealth Bank and RAMS — can send a “mobile lender” out to visit you and discuss your needs.
Consider the alternatives
Specialist home loan companies, such as RAMS, Aussie Home Loans and New Zealand Home Loans, are growing in popularity. The recent global trend is for institutions that can offer products from several lenders. Well over half of all US borrowers now get their home loans this way.
Don’t judge a loan on its rate alone
Your best loan probably won’t have the lowest rate. The features and service you receive can be much more important. For instance, a few of the cheapest loans with fixed rates won’t let you make extra repayments. And those cut-rate loans typically have the highest application fees.
The right loan for you will have a particular combination of features, service and interest rate. It’s unlikely to be the first deal that’s offered to you. There’s plenty of help available. You can find comparisons of loan rates and features at eChoice. Its web-based computer program, called ChoiceMatch, identifies loan products and lenders that match your individual needs. Lending experts will then follow up to explain the details and help you understand your options.
Taking out a home loan has fewer risks than investing (after all, the lender’s giving you money), but you may still end up relying on your lender’s judgements — and be in your best interest. Choose a lending organisation with a reputation for ethical behaviour and you’ll be assured of quality service and financial peace of mind.