Despite record low interest rates, tax cuts and lower property prices in many areas, Australians are negative about their prospects of securing a property, particularly finding the process of getting a home loan both confusing and hard to navigate.
It’s not just first home buyers: 58% of experienced home buyers are still not sure what documents banks assess during the home loan application process.
In fact about 29% of Australians are putting off buying a property because the home loan process seems confusing, hard to navigate and riddled with red tape.
The research of the more than 2,000 Australians, commissioned by Aussie Home Loans and surveyed by Lonergan Research, found 70% described the home loan process negatively, citing it as stressful, a waiting game, overwhelming, confusing, difficult, painstaking and rigid.
Even those already with a home are confused. Sixty-nine percent of homeowners said they knew they should review their refinancing options, but it just seemed too hard.
The role of mortgage brokers
Chairman of Aussie, John Symond, said it was “crazy” to have ended up in a position where the majority of people were negative about the home loan process.
“Put simply, this is a mortgage broker’s role, so it is unbelievable to me that Australians are delaying buying or refinancing due to the process, which they don’t have to do alone,” Symond said.
“To be honest, I do not blame them. There is too much jargon and paperwork, that it is no wonder Aussies are confused.”
Symond said that regulation and banks’ changing credit policies had had a serious impact, adding that it was a “sad fact of the current state of the home loan market that such nit-picking criteria is now being applied to approvals”.
The research found that 87% of Australians believe it is important to know that someone is across all the current regulations, procedures and processes. Four in 5 seasoned homebuyers, such as investors, believe a mortgage broker makes getting a home loan easier.
Stamping out mortgage myths
While more than half of Australians state they have received home loan advice from friends and family, only 37% said they trusted it.
In contrast, two thirds of Australians believe that mortgage brokers make getting a home loan easier, and 84% said they believed there are significant benefits to working with industry professionals.
“Our research identified that the top source of home loan advice Aussies receive comes from friends and family – who in many cases are not experts, fuelling mortgage myths”, Symond said.
To help borrowers with the “mortgage mumbo jumbo”, Aussie has launched a new advertising campaign promoting the role of mortgage brokers as experts in home loans.
“Aussie’s been doing this for almost three decades and we’ve seen it all; the highs, the lows and everything in between,” Symond said.
“The home loan market may have changed, lenders may be asking more of customers and Australians may be more confused than ever, but our mission today is no different to what it was when we first opened our doors. My advice; ditch your hairdresser and tailor’s useless tips and go straight to Aussie.”