Home Loan Myth Busting with Tom Kelly
Since I have been graced with the incredible title of ‘heading up the home lending arm of STAC’ I have been inundated with questions and queries, some of which make me tilt my head from side to side (you know like dogs do when you say things to them they don’t understand).
It struck me that there’s a lot of confusion about what’s involved in getting a home loan. I am here to bust a few myths, clear-up a few things about our role and explain what you’ll need to get the deal over the line. Let’s kick things off with three of the biggest myths and most commonly asked questions:
“Where do you guys hide the fees?” – this is a question we get all too often, so let’s put this one to bed. We do not charge you anything! We don’t charge to find you the best deal, we don’t charge you to navigate the banks, we don’t charge you to make buying/refinancing an easy and smooth process, and we certainly do not charge to be on your side! We get commission from the lender but in no way is this loaded on the rate for the client. This is a cost of doing business that the lenders are happy with, as of last year 56% of loans came from brokers.
“I need a 20% deposit to get a loan.” – a very common myth that the media love to talk about. Let’s be real. It is bloody hard to save 20% of the purchase price especially if you are renting or buying your first home. When you look at the median Brisbane house price of $663,000 as of March this year, saving $132,600 is a big ask. There are many lenders out there who will look at different levels of deposits, even as small as 5% (for a $400,000 purchase can mean as little as $20,000!). If you want to get into the market sooner and you are okay with paying a higher interest rate or ‘lenders mortgage insurance’ (an insurance that the lender takes out as you are a higher risk, they pass this cost on to you). There are also options that allow family members to assist in a guarantor capacity. Fact is, don’t live and die by 20%, talk to someone who can give you options.
“My bank will look after me, I have been with them for XX years” – Bluntly and respectfully, they won’t. Banks are more interested in gaining a new client than looking after you. Loyalty is out the window! When I refinance a client for a better deal, you would be surprised how big a difference the rates can be. I have over 30 lenders competing for your home loan. My record so far is a potential $25k plus per annum savings for one client!
Don’t believe everything you hear, is basically what I’m saying. Get expert advice from people who live and breathe this industry and who have relationships with over 40 lenders, including banks and non-banks, many of whom are hungry for your business.
You are not supposed to know everything, that’s what we are here for! Let us do the hard work for you and if you have any other questions please get in touch. We’re here to make the whole process simple for you!