Research unveils that mortgage mumbo jumbo is the blocker to Aussies purchasing property
New research* commissioned by Aussie has revealed that 29 per cent of Australians are putting off buying a property because the home loan process seems confusing, hard to navigate, and riddled with red tape.
In addition, an overwhelming 70 per cent of Australians described the home loan process negatively, citing it as stressful, a waiting game, difficult, painstaking and rigid.
Aussie’s study of more than 2,000 participants, conducted by Lonergan Research, revealed that it’s not just first home buyers who are confused, with 58 per cent of experienced home buyers, still not sure what documents banks assess during the home loan application process.
Further to this, a stunning 69 per cent of homeowners said they knew they should review their refinancing options, but it just seemed too hard.
Chairman of Aussie, Mr John Symond, said “Today’s property market has all the right conditions: it’s steady, we’ve got low interest rates and national average auction clearance rates are above 75 per cent, however Aussies could be missing out on this opportunity because they’re overwhelmed or confused by the home loan process.”
“Put simply, it’s the mortgage broker’s job to simplify the increasingly complicated process, to minimise and explain the jargon, paperwork and blah blah blah which adds unnecessary confusion to the average Aussie,” he added.
The research found that 87 per cent of Australians believe it is important to know that someone is across all the current regulations, procedures and processes while 4 in 5 seasoned homebuyers such as investors, believe a mortgage broker makes getting a home loan easier.
Mr Symond noted “The last two years have brought sweeping changes to regulations around lending, making it more important to talk to an expert. A broker can help guide you through the application process and are across the constant change in regulations and lender policies.”
“Our research also identified that the top source of home loan advice Aussies receive comes from friends and family – who in many cases are not experts, fuelling mortgage myths”, he added.
Interestingly, while more than half of Australians state they have received home loan advice from friends and family, only 37 per cent said they trusted it. In contrast, two thirds of Australians believe that mortgage brokers make getting a home loan easier, and 84 per cent said they believed there are significant benefits to working with industry professionals.
Mr Symond said: “Two thirds of Australians have received home loan advice from someone, whether they wanted it or not.”
While millennials are the most likely to receive this unsolicited advice, there’s no discrimination. 49 per cent of Gen X and 40 per cent of Baby Boomers reported to receive home loan advice from friends and family.
Today Aussie launches a new advertising campaign aimed at simplifying the ‘mortgage mumbo jumbo’ many Aussies experience. The campaign takes a straight talking, no nonsense approach to home loans. Making it clear that Aussie Mortgage Brokers are the experts when it comes to the home loan process.
This campaign will encourage Australians to go straight to Aussie to cut through the clutter, dispel the myths and do the heavy-lifting for Australians in securing a loan.
Mr Symond concluded: “Aussie’s been doing this for almost three decades and we’ve seen it all; the highs, the lows and everything in between. The home loan market may have changed, lenders may be asking more of customers and Australians may be more confused than ever, but our mission today is no different to what it was when we first opened our doors. My advice; ditch your hairdresser and tailor’s useless tips and go straight to Aussie.”
Aussie’s other key research findings include:
- Three quarters of Australians stated that the benefit of working with a broker is their knowledge, of which women place more value on than men.
- The most common type of myth Australians have heard relates to the size of the deposit needed, ranging between 0 to a massive 50 per cent of the property price.
- 47 per cent think that tax returns are application criteria, and 1 in 10 believe medical history is checked by lenders when assessing a loan.
- When asking Australians what mortgage myths they’ve been told, they ranged from ‘fixed interest loans don’t exist’, ‘you can only get a home loan direct from a bank’ to the more outrageous anecdotes such as ‘women are high risk for home loans because they tend to get pregnant’ and ‘just get a personal loan for the deposit, but don’t tell the banks’.
*The survey was conducted by Lonergan Research among 2,079 Australians aged 18 years and over. Fieldwork was completed in July 2019. After interviewing, data was weighted to the latest population estimates sourced from the Australian Bureau of Statistics.