Economic headwinds: Tips to help find the right home loan for you

At a time of ongoing upward pressure on household budgets across a range of measures, every dollar counts for many Australians and their families. New research from leading non-bank lender, Pepper Money, shows that despite almost all Australians (98%) saying that taking time to understand their options helped them more confidently make decisions, more than half (53%) admitted to having taken the first loan approval option they were offered.

Nearly 4 in 5 of the survey respondents (78%) admitted to experiencing regret at least once as a result of a past financial decision, however 71% of those said in retrospect, seeking additional options would have enabled them to confidently make a better financial decision.

Australians clearly get that it’s in their best interest to explore options, but they admit to not doing the due diligence. The research reveals 71% of the survey respondents would spend time researching different options before making decisions on a phone plan and 70% of respondents before selecting an internet provider, but only 61% say the same about a loan.

How you can get ahead of financial bottlenecks

You may notice that there are areas of your finances that you should be having a better look at. Here are four tips that could help kickstart a look at your financial expenses to understand if there are more efficient options to help manage your cash flow and budgeting better.

Get real help, ask a broker

It can be challenging, confusing, and time-consuming finding the right financial options. The finance market has so many different products, with just as many lenders, and even more experts claiming to know the best option for a home loan, a car loan, or a personal loan.

So, when it comes to loans, getting the help from an expert that is at the forefront of all the latest financial products, options, and lenders, can really help you identify suitable solutions for your circumstances. And contrary to popular misconceptions, brokers actually work for you. They often won’t charge you for their services, and it’s in their best interest (and yours) to match you with a loan and lender that meets your objectives for the long term.

Brokers can also help you fill out the paperwork, negotiate the best deals on the market and be available to answer any questions you may have about your application process.

Options, options, options

There is a lot of value in seeking out your loan options from a range of lenders and most importantly, looking beyond the banks or your main financial institution. A non-bank lender could provide you with a solution that your bank cannot or will not offer you, factoring in things like credit blips, debt consolidation, help for those who are self-employed with alternative ways to verify their income and options for newly established businesses.

Particularly in these times of changing lending criteria, it’s vital that we encourage consumers to have the confidence to seek out and consider their options when looking for a home loan, rather than feeling they have only got one place to go to. They need to know that they have alternative options to explore, that’s why non-bank lenders like Pepper Money were created.

Taking the time to understand your options can be the difference between getting a home loan and not getting one. Also, with a lot of pressure on household budgets, finding the best loan option for your situation can make a real-life difference to your monthly expenses – and sometimes the better option isn’t necessarily the one with the cheapest rate.

Rate vs Repayments

When assessing the options that are available to you, it’s important to consider the repayment amount and not just the rate, as you need to determine whether the repayments are affordable and suitable for your personal financial circumstances. A broker can help you understand your borrowing power and how much your repayments will be or you can use helpful calculators online like the Pepper Money Borrowing Power Calculator.

The Magic of Refinancing

For those who already have a loan, refinancing is an option that can only improve your circumstances (otherwise you just don’t do it!). Refinancing can help you save money by securing a better interest rate and / or lowering your monthly repayments. Refinancing can also help Australians looking to consolidate debt to get back on track and improve cashflow.

There is also the option to free up equity that you have in your current home to fund other purchases or achieve other lifestyle goals like renovations or purchasing new appliances.  

Mario Rehayem is the CEO of Pepper Money.