Online Home Loans
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Beware the publicity surrounding a new online service that allows you to have lenders bid on your loan needs.
It looks like all you have to do is provide your brief details and 16 lenders will beat a path to your door offering ‘unbelievable’ deals with discounts and low application fees and more. The article I read in the Sunday Mail told of how one surprised customer received an offer from Westpac which she had thought would never have made such an offer, implying that it was only because she used this online service.
Another customer is quoted as saying that first came the banks then mortgage brokers now it’s on line bidding. If you believe this get ready for a shock.
There is another quote from the happy borrower saying he was able to get the great deal without having to pay mortgage broker fees!
Here are the facts.
The site offers loans from 19 “lenders”:
- Bank SA
- Opportune Home Loans
- BMC
- Circle
- Citibank
- Collins
- CUA
- Easy Choice
- Homestar
- MKM
- Morgan Banks
- Pepper
- Sapphire
- State Custodians
- St George
- Suburban Management
- United Credit Union
- Westpac
- Yes Home Loans
Doesn’t look like much of a choice to me when you consider that most of the majors and some extremely competitive banks don’t make the list at all.
Oh, and most of the ‘lenders’ are Mortgage Managers or Brokers!
This all points to irresponsible journalism and lack of investigation on the part of the Money Editor for the Sunday Mail.
Or maybe it was a just an advertisement for the new site.
The interviewee sounds like an ill informed borrower eg he was surprised when he learned he had to pay $5000 to leave his current lender. It sound slike he had bad advice in the first place.
Any accredited mortgage broker would have provided all the information he was seeking, plus access to possibly dozens more that could have saved even more money.
And no fees charged for the service!
There are plenty of online offers, but what an online service cannot tell you is whether the loan will suit your purpose, despite the rate charged. Nor will it calculate the value of a fixed rate and the fees involved over a scaled period. Only a broker can do this.
Even Choice makes the ludicrous suggestion that Credit Unions offer the best rates. The fact is rates change almost weekly and an assessment doen one day dose not necessarily apply the next.
Sure, check all the possibilities but don’t expect the advice you receive in newspapers is worth any more that just that. About $100.
Get a Broker to give you a more complete picture.