The past 18 months have yielded some strange outcomes in the housing market. Even as restrictions on building sites came and went, prices for housing sites continued to surge and demand has remained stubbornly high. Indeed, some experts suggest that those fortunate enough to get into the market even a year or two ago have made more on their properties in the past 12 months than they would earn in their day jobs.
With all this talk about money, it’s perhaps not so surprising that more existing mortgage holders are on the move as well. Data from the ABS Lending Indicators reveals that $17.22 billion worth of mortgages were refinanced in July, a $978 million or six percent increase on the previous month.
With interest rates remaining consistently low for the foreseeable future, competition among lenders is hotting up, making it a good time for new homeowners to shop around for the most attractive deal, whether they are new to the market or they already have a loan. Given mortgages have increased on average by $200,000 in the past two years, it’s no wonder homeowners are seeking more ways to save.
Freedom of choice
Clarendon Homes has partnered with Loan Market to provide broker expertise to help their customers find suitable and competitive home loans by choosing from over 60 well-known lenders.
Michael Chadwick, General Manager Home Finance, says there are far more lending options available to borrowers than most people realise.
“There are reputable lenders out there, with a branch network that many customers may not have come across before and who offer attractive loan options that could save customers thousands of dollars” he says. “Mortgage brokers now account for nearly 60 percent of all home loans in Australia – one of the main reasons is due to the way they help customers navigate through the complexity to find a solution that is specific to their circumstances”
For those unfamiliar with the process, mortgage brokers work for customers and not the banks, comparing mortgage features, fees and rates and helping customers obtain a competitive loan that is right for them. They help customers with the paperwork, take confusion out of the many different options available, and liase with the Lender over time.
Clarendon Homes Construction Finance team has one of the largest panels of any Mortgage Broker group in Australia through Loan Market, with broker expertise and services that come at no cost to customers.
It’s a Time-saver
Michael says working with a mortgage broker can save you a lot of time and unnecessary worry.
“It’s about having choice,” he says. “When customers choose a broker they don’t have to do all the leg work and they can choose from many different lenders and loan products at once. Compared to a customer going directly to a bank where they can invariably only offer one solution”
For those customers with an existing home loan, Michael says a mortgage broker can often help you get a better deal on their existing home loan or get a better deal with another lender.
Construction Loan for your new home
Michael believes the recent gains in property prices are unsustainable and the market is now starting to plateau, with more buyers finally able to get into the housing market. For those looking to build, it’s worthwhile understanding differences between loans to purchase an established home versus building a new home.
“When it is a home loan for an established property, the loan is fully financed from the point of purchase” Michael says. “Construction loans work a little differently so that, the funding for the new home being built is not released all at once.”
“The construction of a home may start today, and the Lender will fund the loan over a number of stages as the new home reaches certain stages of construction during the building process.” he says.
Typically, the funds are released by the Lender after major constructions stages like, after the slab is poured, the framework is constructed, brickwork is completed right through to the final stages of completing the new home ready to move into, and it’s at this stage the loan will be fully funded.
The beauty of working with a broker is that they will stay with you throughout the process to manage questions and concerns.
“Brokers can really help around the confusion of building your new home” says Michael. “While it can be confusing and complex, dealing with a Broker who specialises in construction finance is important to help make the process as seamless as possible”
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