FAQ
| Myth: |
Getting the cheapest rate is by far the main thing I should
consider when deciding on a home loan. |
| Fact: |
Paying the least amount of interest and fees over the term of a loan is the most
important thing to consider when choosing a home loan. |
With the saturation marketing employed by Lenders, you could be excused for
thinking that rate was the most important thing when considering a home loan.
Everything you see, hear and read in the marketplace seems to focus on it. Why
then do all the lenders that advertise the whiz-bang special rates also provide
other products at a range of rates? It’s because cheaper rates have little to
do with cheaper loans. Think of how the large supermarket chains advertise dog
food for .29 cents and stick it right at the back of their stores – this is so
shoppers have trouble finding it and must walk past premium-priced items before
getting to their intended purchase. Of course, heaven help you if you took the
kids with you.
Here are some important things we consider when tailoring a home loan package
for our clients:
-
What is the reason for borrowing the money?
-
Is it likely this client’s circumstances will change?
(e.g. baby, promotion, relocation)
-
What are the client’s long term goals for them and their family?
-
What functionality does the client need in the loan?
i.e. What do you actually intend to do with the loan, and do you know all it
can do for you?
-
Is the loan short or long term?
-
Does the client run a business?
While we are not saying rate is not important in the mix of things, the factors
mentioned above greatly impact the type of loan package that best suits a
client. To merely choose a loan based on rate would mean that you run the risk
of not considering the real cost of the loan, therefore not necessarily
choosing the cheapest loan overall.
The Australian Dream
The deregulation of the finance industry in the late 1980’s created a highly
competitive industry – now known as the mortgage industry. This enabled many
more Australians to realise the dream of owning their own home.
Getting a home loan is now far easier than it used to be. Home Loans are more
accessible to more Australians. Products now offer far greater flexibility,
more competitive interest rates, along with lower fees and charges. But, with
such choice available, who do you go to and how do you decide the most
appropriate loan for you?
An accredited MIAA member has contracted with his governing body to work with
you from the moment you contact them through to the settlement of your loan and
beyond. MIAA members are professionals with in-depth mortgage industry
knowledge to help you navigate the complexities of obtaining or refinancing a
home loan.
MIAA members must adhere to the industry Code of Practice which requires high
professional standards, fair business practices, ethical behaviour and
compliance with both the lender and the spirit of the relevant laws and
regulations – all in the interest of you, the borrower.
To maintain accreditation annually, MIAA Members are required to keep abreast of
industry changes and trends and keep their skills and knowledge up-to-date
through MIAA-run or recognised educational events and programs.
Your MIAA member is required to be a member of an external & independent
dispute resolution service (EDR) such as the Credit Ombudsman (COSL). Should
you have a dispute with your MIAA Member talk to them, they will work with you
to resolve the matter. If an agreement can’t be reached, you can refer the
matter to the EDR who can resolve the issue at no cost to you. Their contact
details are freely available.
The Mortgage Industry Association of Australia (MIAA) is the peak body providing
service and representation to more than 9000 mortgage professionals.
The MIAA is dedicated to promoting and maintaining high standards of
professionalism and ethical behaviour, and provides a united voice for the
industry. MIAA strongly emphasises the responsibility of members to act in the
best interests of consumers.
MIAA membership is not compulsory, so when you see the MIAA accreditation symbol
displayed on your Lender’s literature you know they have undertaken to maintain
their level of professionalism of their own accord – sure indication you can
expect to be dealing with the people who know their business and hold your best
interests uppermost in their minds.