Most First Home Buyer Doing Their Homework

Most first home buyers in Australia have done their homework before stepping into the property market, according to a survey by leading mortgage broker Loan Market

Loan Market Corporate Spokesman Paul Smith said a survey of the company’s mortgage brokers found 98 per cent believed first home buyers they had dealt with had done some research.

Mr Smith said while 55 per cent of the 218 broker respondents thought first time buyers had a minimal amount of preparation under their belts, 43 per cent said they had a basic understanding of the key requirements to obtaining a home loan.

He said none of those surveyed believed their clients had done zero research, while two per cent of brokers thought first home buyers “know everything they need to know”.

“Purchasing a property is the biggest financial decision most people will make during their lives so it is reassuring to see most first time buyers are taking the time to educate themselves on the steps involved in obtaining finance,” Mr Smith said.

Mr Smith said the more educated and aware a buyer is of features such as their Loan to Value Ratio (LVR) or their borrowing capacity, the better prepared they’ll be to consider additional charges such as Lenders Mortgage Insurance (LMI) or understanding their repayments.

“Securing finance for your property is a process that involves many steps and several considerations such as the government concessions available and the different criteria lenders apply on an applicant’s income and loan size need to be considered.”

Mr Smith said with the help of a mortgage broker, a first home buyer could be guided along their home loan search by a trusted and independent adviser.

“The value of a mortgage broker for first home buyers is they are independent from lenders,” he said.

“They will not only source the right deal for a client’s circumstance, but a good broker will also take the time to educate a borrower to the point where they’re confident in their home loan decision.”

Mr Smith said the current low interest rate environment offered opportunities for first time buyers to achieve their dream of home ownership.

“It’s also a highly competitive home loan market at the moment so first home owners can shop around for a variable or fixed rate mortgage that suits their needs and has an attractive interest rate,” he said.

Survey Results:

How much research has the average first home buyer done before they meet you?

a) None                                                   0%

b) A minimal amount                             55%

c) They have basic understanding       43%

d) They know everything                       2%