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FAQs

First Home Buyers

Pros:

  • Convenience: Generally banks will have all your details on file which may make it easier for you during the verification phase. This means less paperwork to be gathered.¬†
  • ‘No middle man’: Whilst not always the case, sometimes going directly via the bank may be quicker if you’re in a very tight time frame. Generally speaking the process time frames for both direct to bank and broker channels are similar.¬†

Cons:

  • Limited options:¬†Banks have access only to the products they offer. This can seriously restrict the alternatives especially in getting the best deal in the market.¬†
  • Loan Approval: Your bank may decline your application or not approve the loan amount required based on their policies. This is especially critical for self-employed customers.¬†A broker will help you find a lender who can.¬†

You will need to consider how important convenience is for you in comparison to saving potentially thousands of dollars over the life of the loan. In the past five years alone, consumers using the broker channel have grown by 27% to 59.1% market share, highlighting the value of the broker model (MFAA Industry Intelligence Service Report, 7th edn.)

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    Pros: 

    • Choice.¬†Brokers offer choice to a range of lenders, with industry knowledge on the best deals. They generally have a strong understanding of bank and lenders’ credit policies to ensure your application is likely to meet such requirements and be approved.
    • Expertise: A broker can advocate and push forward your application. The extensive experienced brokers build up from dealing with different institutions provide added expertise.

    Cons:

    • Quality of brokers:¬†There are over 17,000 brokers Australia wide. With such a huge number of brokers, it can be tricky to determine between which brokers are experienced enough and which brokers are new with limited industry knowledge.
    • Research: Deciding on what a good deal is could be tricky. With limited understanding of the finance industry; you may need to do your own research to ensure you can fully trust your broker.

    Benevolence Financial Group requires that our brokers have a minimum of a Diploma rather than just a Certificate IV. Our brokers generally have Bachelor degrees with years of experience working for the banks directly.

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    The First Home Loan Deposit Scheme allows eligible first home buyers to purchase a home with as little as a 5% deposit. Through participating lenders, the government is releasing 10,000 scheme places every year.

    For applicants with less than 20% of a deposit, generally, banks charge an LMI charge (a one-off cost). This protects the bank or credit provider if borrowers are unable to repay their loans. LMI does not benefit the borrower, it just protects the bank or credit provider.

    Click here to find out more about the First Home Loan Deposit Scheme.

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