With the rise of comparison websites, it’s tempting to assume that a few quick online clicks can help you find the perfect home loan. But as a long-serving Aussie Broker tells us, not all loans are created equal.
These days, it seems there are endless options when it comes to home loans but not all of them will be right for your needs. You may see a loan and get your hopes up only to discover you don’t qualify for the advertised rate: there are many reasons why the various loan products you find online aren’t right for you, but it’s hard to know without talking to an expert.
In his 13 years in the game, Aussie Broker Joe Killian, franchisee of Aussie Southport in Queensland, has seen many scenarios in which lender limitations have excluded home buyers from being eligible for certain loans. “There’s no such thing as the best lender or the best loan because it depends on your individual circumstances,” Killian says.
Each lender has a long list of conditions they apply before they approve a home loan application, according to Killian. These can include borrowing capacity (the amount you can borrow and therefore the size of a deposit you need), loan to value ratio (the proportion of money the lender is prepared to give you compared to the value of the property), whether you’re buying a home, an apartment or a commercial property, whether you’ll be building a new home from scratch, whether you’re an owner-occupier or an investor, and many other conditions and circumstances.
“It can also depend on postcode or the type of development you are buying into,” Killian adds. “Some lenders don’t like small units, for example, so you may find it hard to find a loan.”
To complicate things further, lenders are constantly changing or tightening the rules, which can make it hard to keep up.
Tap into a broker’s wealth of knowledge
An Aussie Broker has access to a range of 21 lender and hundreds of different loans. A huge advantage of using an Aussie Broker is that they are constantly examining the different loans on the market, taking into account the various fees, initial and ongoing charges, mortgage insurance, flexibility, genuinely useful loan features versus expensive but unnecessary extras, as well as ‘honeymoon rates’ that look attractive online but revert to something much higher within two or three years.
“We have a wealth of knowledge we can tap into – not just our own experience, but also that of other brokers in the network,” Killian says.
Another benefit of using an Aussie Broker is that they can negotiate directly with lenders to achieve a lower interest rate or speed up the application process if timing is an issue. “We can negotiate on rates. It’s all about knowing which lender has the appetite for a discount at the time,” Killian says.
“And we know which lenders will be able to satisfy a quick turnaround for home buyers who may have signed a contract with a short turnaround.”
Work out what you really need
Killian stresses that the interest rate is just one of the many features of a home loan you should consider. “People are very rate sensitive, which is understandable, but they could be missing out on some very good products because they don’t realise what will suit their needs,” he says.
An Aussie Broker can look at your entire situation – including short-term, medium-term and long-term goals – and help you assess all the options available to you.
“We have no vested interest in pushing a particular product,” Killian adds. “Our job is to help customers understand what they need and what they’ll use.”
“You can buy something with all the bells and whistles, but if you don’t know how to use all the bells and whistles, it’s pointless. For example, it’s about understanding how an offset account works correctly, and what a redraw facility does, and how salary crediting works.”
One customer’s story
In one recent case, Killian was able to help a home buyer with a very specific circumstance secure a home loan in record time. The buyer was a British citizen with an Australian wife who had been in the country for less than a week and had yet to lock in a job. He had a large deposit but lenders normally require proof that you’ve been with an employer for three months before approving a loan.
“He was expecting a job offer the following week so I worked with him to gather all the information needed and got a loan approved fairly quickly with a major bank with only one pay slip submitted,” Killian says. “We could demonstrate an earnings and savings history in the UK, which helped secure the loan, although some banks still wouldn’t go near him.”
If you’d like to speak to an Aussie Broker today and get your property plans moving get in touch here.