ARE you considering buying property in the near future? If so, 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.
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.
Mortgage Choice spokeswoman Jessica Darnbrough said borrowers should not necessarily put all their eggs in one lender's basket and settle for a lending institution that they already have an existing relationship with.
"Despite the fact that there are hundreds of loan products on the market and many of Australia's lenders are offering some fantastic borrower incentives, a considerable amount of borrowers will apply for a loan through their current lending institution," she said.
"By choosing a home loan lender on banking history alone, borrowers could be selling themselves short when it comes to finding the best home loan deal for them. There are many lenders out there offering mortgage products whose features may be ideally suited to a borrower's needs. Of course, if they don't shop around, they will never know what is on the market."
Ms Darnbrough said a professional mortgage broker can help borrowers compare loans from a wide range of lenders based on the loans' interest rate, fees, features, 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," she said.
"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."
Mortgage Choice offers its top five 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.
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. Get your mortgage broker to compare how the lender stacks-up in terms of the fees and charges on the loan (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.
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.
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).
If you want to learn more about your home loan options, call 13 6678.