Do you find yourself spending hours going to different banks to ask for the latest home loan rates, only to realise that they've changed from just a month ago? How much time have you spent looking at all the home loans available and comparing them point by point? It's surprising that consumers have the notion that enquiring through a home loans comparison platform (i.e. mortgage website/broker) for their home financing needs would be more expensive versus going through a bank/property agent.
In reality, the former allows the consumer a convenient and hassle-free way to find out for himself the various home loan options available in order to make a well-informed decision. Besides, the consumer will not incur any additional cost to financing his home this way. In fact, he's able to save a lot of time and effort both physically and mentally tabulating, deciphering and comparing various home loan packages. Here we at GET.com list 3 common misconceptions that home loan borrowers have, and seek to clarify them.
Misconception #1: Banks Should Be The Most Transparent Source For Mortgage Rates
To a certain extent, that's right. When you go to a bank directly to enquire on its home loan rates, the mortgage specialist will most likely find out about your mortgage needs and show you the current mortgage rates offered by the bank.
In fact, you'll see the same rates offered by the bank when you go through a home loan comparison platform. In this case, all these sources are transparent about their rates.
The difference is, the mortgage specialists ultimately work for their banks, and they can only provide you a limited choice of home loans in Singapore.
No one is going to tell you that a rival bank has a similar home loan offering rates at 2 percentage points below their own bank.
Or they are likely to tell you - yes, their rival bank has this similar home loan package at a lower rate, but there's a host of other negative things you need to take note of.
Let's be objective, there's no perfect home loan here and we really can't blame the banks for recommending their own products, can we?
Perhaps the only time you are going to encounter a bank referring you to someone else is when you don't qualify for their loan.
Misconception #2: Since My Property Agent Knows About My Financial Situation, He Is In The Best Position To Make A Recommendation
Property agents are adept at finding the best property for you that suits your financial situation and requirements, but mortgage loans aren't their forte.
They can, of course, advise you on certain things about your loans, but ultimately they will refer you to someone else, usually a banker or a mortgage broker.
Property agents receive a referral fee from the bank if you go with their recommended banker, so we are back to the first point above.
Most agents work together with a banker as property buying and financing are obviously complementary business, so why not earn extra commission simply by doing a referral? His clueless client might even thank him for that!
Remember that your loan repayments do not affect the price you will pay for your home, so there's little incentive for your property agent to get you the cheapest loan possible.
Misconception #3: Getting A Home Loan Through A Home Loan Comparison Platform Is More Expensive Compared To Banks Or Property Agents
Many of us may wonder... how can a home loan comparison platform offer us the same home loan rates as banks? How does it benefit from this?
The objective of a home loan comparison platform is to help you compare home loan packages. Similar to how property agents work, they get a referral fee from the bank if you successfully get your loan through them.
This amount is not any "extra" fee levied on top of your home loan from the bank; rather, the referral fee has already been factored into your bank loan's margin as a type of "distribution cost".
Hence, you are not paying a single cent more than the existing fees that come with your home loan, and there is no impact on your loan quantum when you go through this method to finance your home.
The advantage of going through an established home loan comparison platform is that it is not tied to any banks and is here for the long term.
Hence, it is compelled to get you something that suits you best because they want your home loan application to be successful.
In return, it would be able to build on its credibility and gain your repeat patronage say if you intend to refinance or apply for another loan in the future, or your word-of-mouth referrals to your mortgage-hunting friends. In short, it is on the borrower's side.
A Home Loan Comparison Platform Adds Value To Borrowers
From the points above, you can see that having an aligned interest is one of the main reasons why borrowers should look to a home loan comparison platform for their home financing needs – no extra fees, no wastage of your precious time going to different banks and full transparency.
Other than that, there are a couple of other compelling reasons we would like to highlight as well.
One key advantage a home loan comparison platform has is that it has a wider view of the market and knows the home loan rates out there. If there's one single key selling point, it is knowledge.
Knowing the different rates offered by banks, why the lowest rate may not suit you, getting a fixed-rate home loan versus a floating-rate home loan... the home loan comparison platform literally needs to be aware of the current rates in order to earn their keep.
Isn't information and knowledge of different rates what borrowers are seeking when they approach the different banks in the first place?
Now that you know how it all works, stop wasting your time chasing down banks or your property agent.
Instead, simply check out the Home Loan Genius tool for all the available fixed or floating rate loans for your needs, whether you want to refinance your current home loan or get an affordable loan for your new purchase.
While you are at it, you can also find out more about home loan financing through GET.com's useful home loans guide, and discover the happenings around your district in our district property guides below.
Check out our Marina Bay and Chinatown property guide to get information about property prices and amenities in this district.
Interested in other districts? Here you can find information about Tanjong Pagar properties, Tiong Bahru and Queenstown properties, Telok Blangah and Sentosa Cove properties as well as Pasir Panjang and Clementi properties.