Most Home Owners lack the knowledge and experience to choose the correct home loan for their financial circumstances and requirements. Many people are making their choice incorrectly and are paying for it dearly.
Some home Owners only care to know that their home loan is with a large bank, others only focus on interest rate quoted, but few take into account loan features.
When home loans are discussed, interest rates are often given more weight than is sensible. Everyone seems to have a strong opinion on the best lender and home loan, with their prior experience often seen as expertise. Too often, a potential borrower doesn’t shop around, believing there is little difference between lenders, loan product suites and/or that one lender is much more secure than another.
According to a recent survey of Home Owners by Mortgage Choice, only 22 percent of Australians base their choice of lender on the fact that it was ‘the cheapest all-round’. This means that majority of borrowers do not do so. How much money do these borrowers waste by not looking at all the facts and figures?
While the interest rate that you pay on your home loan is important, potential borrowers shouldn’t look at that aspect alone before choosing a lender and loan product. Home Loan fees should also be carefully considered as should features such as offset accounts and redraw facilities. Service quality is another element.”
It is all too easy to approach the lender where you already hold your bank accounts – but they do not necessarily offer the best fit product.
“Although it is tempting to make life changing decisions based on the opinion of people closest to us, taking out a home loan is a very important financial commitment that often has ramifications if executed incorrectly. Take the time to choose wisely!”
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