As the property market continues to soar and competition to buy a home becomes fierce, Australians want mortgages – and they want them now. Recent ABS figures show that the number of home loans has increased by 10.5% since January alone.
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There are many different mortgage companies that claim to give you the best deal on your home loan. A mortgage is one of the biggest financial decisions you will make in your life and choosing the right lender can make a huge difference to your financial future and success.
But how is the average borrower supposed to know what the right lender is? It is not that all of us can be experienced industry professionals who know the exact essentials of home loan products.
That’s why we engaged thousands of leading mortgage brokers during a 12-week research process to determine which features they believed were most important in a mortgage lender and which lenders best illustrated these characteristics.
These are the characteristics that mortgage brokers consider most important in a lender:
Fast response times for processing and approval
Our research shows that the most important consideration when choosing a lender is the speed of their processing and approval processes. Ninety-one percent of those surveyed rated the processing and approval speed of a home loan application as the most important or most important factor in choosing a lender. This makes sense, as the current housing market moves quickly and any delays could lead to borrowers losing the home of their dreams.
Low interest rates
The next most important consideration when choosing a mortgage lender, according to our results, is the lender’s interest rates. Eighty-three percent of respondents rated a lender’s interest rate as important or most important. Obviously, the lower your interest rate, the less you will pay over the total term of your loan, saving you thousands of dollars, if not more.
High quality customer service
Obtaining a home loan can be a difficult and frustrating process. It’s no wonder that quality customer service is another important feature a mortgage lender should consider – 70% of respondents said good customer service was important or most important when choosing a mortgage lender. Being treated like a human who works with other people to achieve your goals, rather than an anonymous number trapped in a labyrinthine nightmare of bureaucracy, can make all the difference in your experiences with a mortgage lender.
Interest rates may be the most obvious part of a home loan to consider, but you shouldn’t overlook the fees and other additional costs that home loan products often incur. Mortgage professionals advise you to always research and consider the cost of your home loan. In fact, 53% rated fees as a major or most important factor in a lender.
Flexible Online Options
In the changing landscape of COVID-19, technological accessibility is more important than ever for lenders. Being able to track and monitor your household economy via internet banking was chosen as important or most important by 30% of the respondents.
After establishing our criteria, we ranked a wide range of lenders in these categories leveraging extensive feedback from mortgage professionals and clients.
Read more: Revealed – Australia’s Top Brokers of 2021
The following 10 lenders scored highest:
1. Heartland Reverse Mortgages
Heartland Reverse Mortgages is Australia’s largest provider of reverse mortgages, founded in 2004.
“At Heartland we believe that what sets you apart from others [lender] does the customer’s good, which is why we place so much emphasis on our duty of care with our reverse mortgage,” said head of operations Sharon Yardley.
Homeloans.com.au is an award-winning provider of flexible and highly competitive home loans for owner-occupiers and investors. It is a subsidiary of Resimac Group Ltd, which has been in business since 1985 and has been recognized as Non-Bank of the Year in the Australian Mortgage Awards 2020.
“Small but important details, such as ease of application, approval turnaround times, and overall customer service, not just pre-settlement, but throughout the life of the loan,” said CEO Scott McWilliam. “For a complex transaction like a home loan, the ability to keep things as simple and frictionless as possible certainly separates the wheat from the chaff.”
3. La Trobe Financial
La Trobe Financial has been providing financing and investment solutions to a wide range of clients since 1952. Their home loan products include flexible features that cater to a range of purchasing, refinancing and business/investment requirements.
“Non-bank financial institutions such as La Trobe Financial are ideally suited to provide creditworthy applicants appropriately during this time, thanks to the customized nature of our credit ratings and willingness to take the time to fully understand their unique position , and provide an appropriate tailor-made solution to meet their objectives and requirements,” said Chris Meaker, head of origination channels at La Trobe Financial.
4. Better choice
Better Choice is one of Australia’s leading and most innovative mortgage lenders. They partner with mortgage brokers to offer individualized and innovative solutions for their clients, from first-time homebuyers to investors, construction, bridge financing, non-residents, SMSF and more.
Their ability to accept alternative income documentation means Better Choice is also the preferred financer for brokers with clients unable to provide the traditional two-year financial statements and tax returns generally required to obtain financing.
5. Macquarie sofa
Macquarie Bank, originally based in Sydney, has been operating in Australia since 1969. Starting out as a three-person branch under the name Hill Samuel Australia, it was granted an Australian banking license in 1985 as Macquarie Bank Limited.
Now the Macquarie Group is a major global financial institution with offices in more than 28 countries, including the United States, Hong Kong, Great Britain and Germany. Macquarie Bank has won numerous awards, including Money Magazine’s 2014 Best of the Best award for cheapest home loan package.
6. Commonwealth Bank
Commonwealth Bank of Australia (CBA) is one of Australia’s ‘Big Four’ banks. Founded in 1912 as a government bank, it has since gone on to become a private multinational with 1,100 offices worldwide in Asia, Europe, New Zealand and North America.
In addition to their standard variable and fixed-rate loans, one of CBA’s most popular products is the “Extra Home Loan,” which allows borrowers to save on the front of the mortgage with an introductory rate, or offer a discount for the duration of the loan – or if you are buying a home for the first time, both.
ING, the world’s largest direct savings bank, has been offering Australians access to a selection of flexible, low-yield home loans since 1999. ING is an online-only lender, which means that the savings generated by not having to maintain branches are passed on to customers through reduced rates and fee waivers.
Because ING has no branches where customers can go directly, they consider their online accessibility and customer service to be of paramount importance.
Firstmac started as a small family business in Brisbane over 40 years ago and has grown to become one of Australia’s leading non-bank lenders. They offer easy home loans for ordinary Australians looking for an alternative to the big banks.
Firstmac says, “We are committed to bringing simple, affordable, competitive financial products to market, backed by a long track record of success and a pedigree in prime home loans.”
9. Adelaide Bank
Adelaide Bank was founded in 1994 and grew out of the Co-operative Building Society of South Australia, the largest construction company in the country at the time.
In 2007 they merged with Bendigo Bank to form Bendigo and Adelaide Bank Limited, Australia’s fifth largest bank. Adelaide Bank offers a selection of simple yet flexible home loan products, as well as dedicated, personalized customer service.
National Australia Bank (NAB) is another of the “Big Four” banks in Australia and one of the top 50 banks in the world. Founded in 1858 as the National Bank of Australasia, NAB has been a multinational bank since 1864 when they opened their first international office in London.
NAB allows borrowers to bundle home loans with other products — such as credit cards or home and contents insurance — at a discounted interest rate, as well as offering contra accounts and similar benefits on other loans.
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