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Getting a home loan with a bank other than the BIG 4

Deciding where to go for your home loan is one of the most important decisions you’ll make. While many prospective property owners will choose to use one of the big 4 (ANZ, CBA, Westpac and NAB), there are many home-loan options out there with other lenders, credit unions and building societies. Let me explain.

What are my options outside the big 4?

Many of my clients are choosing lenders outside the big 4. From ING, Macquarie, Teachers Mutual, UniBank, Suncorp, MyState, Virgin, Adelaide Bank (the list goes on and on...), you need to be aware that there are many loans - and lenders - from which you can choose.

As a mortgage broker I use my understanding of each bank's products, rates and features to make you aware of what your choices are and what bank you are most suited to. Sounds pretty good right? I think so.

Potential benefits of looking outside the big 4

There are several benefits associated with taking out your home loan through a second-tier lender, smaller bank, a credit union, mutual bank or non-bank lender.

  • Lower overheads, generally meaning lower fees. These lenders usually have smaller overheads, because they have fewer offices often do not have a branch network. This should lead to lower fees and better rates. Maybe you don't need a bank with a branch network?

  • Industry associations. Some banks, credit unions and mutual banks focus on what you industry you work in or what qualifications you have and tailor their loans specifically to you. Do you receive pre-tax benefits? Do you earn a lot of overtime or do a lot of shift work? Are you a health professional, work in the essential services or have a uni degree? By understanding your job and what you do, these lenders can assess you in a different light to mainstream lenders. Remember not all banks are the same. What are you missing out on?

  • Customer service. Smaller lenders try to offer a more personalised service because they tend to have a smaller database. It’s likely that you’ll be given more attention right through your home loan process, even after you’ve signed on the dotted line. Also, while you sometimes might deal with multiple people at a bigger bank, with credit unions and mutual banks it’s more likely that you’ll be dealing with one person from the beginning.

  • Approvals. Sometimes it can take a while to get a home loan approved by a big bank. With a smaller lender, you may be approved more quickly because you’re potentially talking to the loan decision-maker. And that's where my role as the go-between between you and the bank kicks in.

  • Range of choice. Given the range of lenders out there, you have a decent chance of finding one that suits your particular needs and circumstances. It's pinpointing exactly which bank is best for you.

Finding the right lender for you is what’s most important. You’ll be the one making the repayments, so you need to be happy with the rates, service and fees that are offered. My advice, keep an open mind as to where to place your home loan.

More importantly find out what is on offer with both banks and non-bank lenders. You only know what you know. Let me explain to you what is on offer across a range of banks and you decide where you best fit.

Bernadette Leahy

The Edge Mortgage Consultants

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