Posts Tagged ‘mortgage brokers’
Shopping Around Pays For Borrowers
Tuesday, December 8th, 2009
Borrowers who assume there is no competition in the home loan market could be missing out on thousands of dollars in savings. A significant disparity has opened up between lenders on interest rates, fees and credit policies in the last 12 months. There tends to be a widespread view that all banks are the same, offering pretty much the exact same products with the exact same requirements. However when you make comparisons between lenders, it quickly becomes clear they are not all the same. Borrowers can potentially save thousands of dollars by shopping around for a deal that better suits their needs. One of the big differences between lenders was how much of the purchase price of a property borrowers could get access to. There are lenders requesting an LVR (loan-to-value-ratio) of 88 per cent with a deposit of 12 per cent, compared with a lender at the other end of scale that is requesting only a five per cent deposit. If you paid a 12 per cent deposit on your dream home valued at $500,000 for example, the lender would require $60,000 – versus $25,000 if you were required to pay five per cent of the property’s value. Also, once the LVR is more than 80 per cent, the lenders mortgage insurance premium kicks in – and this, too, varies between lenders. Borrowing limits could also differ between lenders, with some offering a $60,000 income earner up to $250,000 in finance, while others would provide up to $300,000.
