Choosing the right lender for your specific circumstances is my job as a Mortgage Broker. I want to give you some insight into the thoughts and processes that form part of this decision. You might be surprised to find that the ‘lowest rate’ isn’t always the highest priority!
First things first, do you have a preference for which bank you’d like to use? Perhaps you have a definitive idea of one or more banks that you definitely do not want to use (like the Big 4)? This preference could stem from a good experience with a bank you’ve used for years, or negative things you’ve heard from friends or in the media. Your preference is important because of the long-term relationship you’ll have with the lender. Home loans can be a 30 year commitment!
Each lender’s policy differs from the others. Your application could be denied if you don’t fit the lender’s policy. That’s why a preliminary assessment of your circumstances is undertaken. This includes;
- Employment type and length
- Income and expenses
- Living and family situation
- Purpose of the loan
- Eligibility of the security
- Previous customer behaviour
- and savings pattern.
The next test to narrow down the selection is practicality. Does that lender offer the Offset facility you need? Will that lender be able to approve your application in time for your last minute settlement? Does the lender need you to attend a branch which is 2 hours away?
Finally, we come down to the easiest variable – price. Price isn’t just about rate. It’s also fees such as;
- Application fees
- Settlement Fees
- Risk Fees
- Lender’s Mortgage Insurance
- Monthly or Annual fees
- All these costs need to be assessed and evaluated when comparing suitable lenders.
- For help finding a home loan tailored to you, get in touch today.