Sam: What are the three big myths around home loans that Australians still believe?
Hey guys, it's Sam from Lendi, Australia's number one online home loan platform, where
we have helped thousands of Australians refinance or buy their first property and also helped
clarify a lot of misunderstood facts about home loans.
Watch this video where we debunk three of the most popular mortgage myths and sort fact
from fiction to help give you a more accurate understanding of the home loan process.
Sam: Now before we start, for great home loan tips in Australia make sure you subscribe
to our channel and hit the bell so you can get notified when we post new videos.
Sam: Myth one, is it safer to get a home loan with a big bank?
Many people want to get a home loan with their every day bank or a big four bank because
they think that it's more secure.
They feel like small lenders are less secure and in the event of an economic crisis, their
home loan or even the house could be at risk.
In reality, most small and online lenders have the backing of a big bank.
Small lenders that are banks, credit unions, building societies, or even near banks are
heavily regulated by APRA, the governing body of the industry.
Sam: Although small lenders could be impacted by economic instability, these days there
are a number of different scenarios that will protect you as a borrower.
The first being, the small lender is likely to be bought or acquired by a bigger lender.
The second is a large institution buys your mortgage from a smaller lender.
The government also provides assistance through the deposit guarantee.
In all of these scenarios, nothing really changes for you as a borrower except that
you may get a new lender, however, the conditions and lender of the loan may change.
Sam: In the very unlikely scenario that you did end up with a new lender and your lender
did increase rates, you can always look to refinance with another lender.
Sam: Myth number two is that lenders will reward customer loyalty.
It's a common myth to believe that your lender will look after you the longer you stay with
them because you're paying thousands of dollars worth of interest over the life of the loan,
but the truth is the majority of lenders in the market actually offer better interest
rates to new customers.
For example, when the RBA recently dropped the cash rate, not all lenders passed on the
cut to their existing customers.
Sam: This means that in just a few years, your interest rate might be outdated and could
be costing you thousands, as there are a significantly lower rates offered to new customers and other
customers in the market.
As a customer, you really have two options.
You can try the loyalty card with your existing bank and see if they'll drop your rate or
match the rate they're offering to new customers, or you should simply be prepared to walk.
Sam: There's a high chance that your bank won't budge on your rate or won't be able
to offer you the exact same rate offered to new customers or even what other customers
can get by other lenders in the market.
In both cases, you need to start by doing some research online and comparing how your
rate stacks up against the rest of the market.
Sam: The final and most common home loan myth is that people think that refinancing is hard,
complicated, and time consuming.
This puts off many homeowners from even thinking about the process.
In reality these days, it's a relatively simple process to refinance and the whole process
can be done in a matter of a week.
It's a good idea to start online and look to compare different home loan options using
an online platform.
Remember that a small rate reduction can save you thousands worth of dollars over the life
of the loan and can shave years off your loan term.
Sam: For more information on the complete refinancing process, check out our YouTube
video here.
That's it guys.
Three of the most common home loan myths busted.
If you're looking at getting a home loan or want to decrease your payments, check out
Lendi.com.au.
Our online home loan platform allows you to compare rates and apply online, uploading
all your documents anytime 24/7 without having to visit a branch.
You'll also have a home loan specialist on hand to help you at each step of the way.
Sam: Now if you're looking for more tips, you can also join our Home Loan Hacks Australia
Facebook group, where we will answer all questions and talk all things home loans.
Finally, if you found this video helpful, remember to give us a thumbs up and ask us
any questions in the comment section below.
If you want more information on other relevant home loan topics, you can check out our other
videos here.
See you next time.