Last week’s RBA rate cut remains a hot topic and for people on the hunt for a new loan, or to re-mortgage, how do you know which lending agent is right for you and who’ll actually give you the best deal?
Colin Mason, director of SMS Finance, Maroochydore says the flow-on effects of last Tuesday’s announcement by the RBA resulting in the lowest interest rates for over 50 years are twofold.
“The interest rate cuts and the subsequent passing on of the full rate cut (by most banks), in such a short period of time, has definitely sparked more interest from home borrowers.
“Not only are borrowers’ loan repayments significantly lower than previously, but the banks’ assessment rates mean they may qualify to borrow more than they could before. It’s probably too early to tell what impact that will have on local housing prices and the Sunshine Coast economy, but the signs are promising,” Mr Mason says.
Trevor Ryan, mortgage broker at Aussie Home Loans Coolum, predicts rates will remain low for the next six months, further benefiting borrowers.
“Importantly, many lenders will continue to offer a range of incentives for new customers, so first-home buyers could be in a good position to find a very competitive home loan deal.”
Mr Ryan says if you are in the market for a home loan, there are generally three ways to go about it. “You can apply with your bank directly, shop around for a deal yourself, or get a broker to do it all for you.
“Many customers chose to go with a broker because not only do they have access to more than one lender, they often communicate with third parties to provide further evidence they may need to assess your application, liaise with valuers, your solicitor, your builder (for construction), and even real estate agents (if you’re buying an investment property or buying at auction) to ensure a smooth application process,” he explains.
Nicholas Barker, Bank of Queensland owner-manager at Maroochydore says many of his customers opt for a bank because they’re after a finance partner that’s more than just a transaction.
“I’ve been in finance now over 15 years and the overarching themes have been trust and relationships. With a team of 14, we find that our clients can relate to someone in our team.”
Regardless of the lending type, our experts agree there are ways borrowers can increase the likelihood of getting a loan.
Mr Ryan says, “I encourage customers to remove unnecessary financial commitments; have a strong savings history, and maintain stable income.
“Have a clear picture of what you want, so you can have a meaningful discussion with a lender. And choose which lender to talk to, or use a broker, as lender’s credit policies can vary significantly; and whilst you may not qualify with one lender, another lender may happily approve your loan request.”
And when it comes to the next 12 months to two years, Mr Barker concludes: “The old saying about interest rate prediction needs a crystal ball remains the same. Regardless of the interest rate, ask yourself every six months whether your home loan goal is on track. Have a plan and review it regularly.”