Why doesn’t everyone just find the cheapest home loan? I’ll tell you: It’s because conversations with seaweed are more interesting than loan comparison. After the 11th interest rate presentation, most people would rather eat their own liver than visit another bank. They just can’t be bothered searching any more. And that’s why we need online loan comparisons:
The Trouble With Home Loan Comparison
There are over 50 home loan packages on the market at any time. Out of those 50+ packages, only two or three will be the best.
Finding those best packages means a lot of research and comparison. That’s why some borrowers get caught with steeper rates: They didn’t have the inclination or time control powers to sort through 50+ loans.
To add to the confusion, the home loans market is dynamic. Banks change their offers constantly, so packages available now may not be available next month.
You have limited time to sort through the packages, spot the good ones, and apply before they’re gone.
How Home Loan Comparison Sites Help
Home loan comparison sites like MoneySmart act as a middleman, connecting borrowers with the right banks. The main reasons to use them are:
- The Bank Pays for the Service
- It’s Faster
- It’s Easier
- Transparent Comparison
- Advice From Mortgage Specialists
1. The Bank Pays for the Service
Sites like MoneySmart are free, because the cost is borne by the banks.
See, banks have trouble getting the word out even when their home loan package is currently the best. It’s not something they can advertise on the back of a cereal box. Besides, what’s the point of advertising when their offer’s probably going to change next month?
Enter loan comparison sites, which exist to highlight the best package of the day. These sites direct potential borrowers to the best packages, and in return, the banks offering those packages pay a referral fee to the site’s operators.
The end-user (the borrower) is hooked up with the best loan package, and doesn’t pay anything.
2. It’s Faster
There are over 12 banks offering 50+ home loan packages. When it comes to acquiring all this information, even veteran property buyers feel their sanity slip out the back door.
By the time you’re done talking to every bank, the proverbial cows would have been home for a week.
A loan comparison site aggregates all the loan information (from every bank) in seconds, and picks out the cheapest. Believe me, this will save you many eye tests in your old age.
3. It’s Easier
It depends on the site; but with MoneySmart, the online query is often easier than talking to a banker on the phone.
The process is systematic; so you get asked whether you want a fixed or floating rates, whether you are okay with lock-ins, etc. And if you don’t get these terms, there are information tags explaining them.
If you’re a first –time borrower, this guided process is an education: You’ll actually understand the range of considerations you need to make.
You can get an equal education by following us on Facebook. This is our surrogate social life, which we long ago surrendered to study home loans.
4. Transparent Comparisons
Every banker is obliged to promote their own bank.
The staff at Bank X are not going to tell you Bank Y is better suited to you, or vice versa. Not if they want to continue being staff at that bank. And besides, most mortgage bankers know little beyond their own packages.
But MoneySmart works with all the banks, so you get something like this:
That’s a comparison between the loan packages of all the banks. You can see exactly where a given package stands, and the alternatives. If you want to verify the information, it’s a simple matter to call the listed banks and check.
5. Advice from Mortgage Specialists
On sites like MoneySmart, there may be a mortgage specialist on hand. They can call you directly if you need advice.
Mortgage specialists also help you get your million odd pages of application forms in order. This is helpful for new borrowers, who typically end up playing Document-Pong with the bank (Get a form, send it. Get it back, re-send it. Repeat ad nauseam.)
Mortgage specialists also have contacts in the banking industry. Sometimes…just sometimes…they can pull strings. If your loan falls just short of approval, or you want a tiny adjustment to your interest rates, they might be able to get it for you.
Give it a try, it only takes a couple of minutes, but the savings can be pretty substantial.
Do you use home loan comparison sites? Comment and tell us how it went!
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