What "Service" do you expect from your Lender?

Im curious to know what people generally expect from their lenders? The reason I ask is I just spoke to someone who has their loan with Big 4 Lender paying 5.2% (wow). While asking whether she realise they can get their rates below 4%, the response was that they heard those lenders provide terrible services. So I questioned her, for a home loan, what services do you expect? Your homeloan can be with one lender and you can place your day to day banking with another … but really she wasnt able to answer as to what 'service' she was referring to that she wanted from her home loan. So I thought I'd throw the question out here, so as to help me understand consumer logic.

A homeloan is a homeloan, you can have certain facilities attached to it when it's set up, you might have some variable delays with establishment as turnaround times for different lenders vary, but apart from that. What services do you want your Lender to provide once the loan is establish?

Comments

  • The fact that they gave them a loan at all since they must have something going on to have that rate.

  • Money

  • +1

    People that feel they are being attacked or put down for a decision will double down with silly reasons. Don't read anything into it, it's human nature. Just stop making people feel stupid.

    • Pretty spot on answer.

      But Op seems really interested in why people don’t shop for a lower rate when there’s big bucks on the line. In fact, I’m interested too, so how to ask such a question without making the person feel stupid about their decision?

  • They were told that they get services and so they think they get and need them.
    If questioned they probably get discount movie tickets and wine offers. They take brand name ibuprofen and paracetamol because they are told to.
    Am I willing to pay an extra $5k a year in interest so I dont need to scan documents myself during the application NO. But lots of people need hand holding all the way, so they pay.

  • Just to further address, these r PAYG clients, stable corporate jobs and no negative credit records, so their rate isn't due to any particular risk fee, it's just that their initial discounts expired and they haven't done anything abt it.

    My curiosity stems from what "services" people expect from a home loan which is very different from something like day to day banking. And as another example, someone here saying they made all the necessary calculations to conclude a particular lender to be the cheapest but is reluctant to go ahead because of the concern about the 'service' level.

  • For my first property purchase I used a broker, and ended up with a mortgage with a different bank to my primary transaction/saving bank (one of big 4).

    The second time, I went direct with my primary bank. The benefit for me was a speedy and easy application and approval process. They had all my details. I like being able to see all my financial products through one online portal, and having my regular transaction account as the offset account. They have very good call centres and phone service if I ever need to call about anything.

    I’ve been with my bank for more than half my life. And I feel I’ve gotten good services from them over that time. There are costs involved in switching around, and some people value stability and a solid brand.

    Every couple of years I do a bit of research, call up my bank and negotiate a bit of a discount. It helps that they can see my repayment history as well as on the cc. I know it’s not the lowest interest rate around, but at 3.72 it’s not bad.

    OP, your friends/clients are just paying the lazy tax.

    • +1

      Having everything with one bank can be problematic if they ever consider you to be in default and able to consolidate all your accounts (ie apply cash available to debt). Consider very carefully what you would do if that ever occurs as you don’t want to be caught out when it is too late.

      For this reason alone if you are operating a business and don’t get the benefit of consumer regulation I would suggest you separate your banks between the one that receives your revenues and the one that is owed the money. This reduces the risk of all cashflow being retained by the bank.

  • I expect the lender will actually apply an interest rate in accordance with the loan contract, and that any offset is properly applied. As simple as these things sound, I have caught lenders out charging interest not in accordance with the contract (and not just on one occasion). You should always double check your statements (even at a broad estimate level). Then I also expect that the lender will not charge a rate higher than that which they are publicly offering through their website for incoming customers. If they do that then I will expect to be matched. If not, I will be gone.

    I do not care about much else.

  • I think these people are scared that their no-name home loan lender might be a fly-by-night and on shaky ground. They think that there is a high possibility they could go out of business overnight. "Oh no, who am I going to make my repayments to now?" :) Clearly they have it arse-about. You only worry about stability and reliability when they are holding your money. They have already done you a service by lending to you in the first place. There is nothing more to expect from them.

  • Ive heard the "cheap" lenders sign you up and then increase the rate on you unnecessarily. Other than that I wouldnt care less, its a home loan.

  • Looking back over the "packages" that the big 4 were trying to sell me, it was mostly useless stuff I would not need. As you said mostly let us do it all for you and then you can have everything in one place through us. Benefits they were pushing included a fee free transaction account (which you can get anywhere), fee free gold credit card (save ~100/y), 10% off home insurance through them (was 20-50% more expensive than through others), access to bridging loans, access to guarantor loans (not needed), upfront fees were less, but mostly it was all through them and in one place for the low price of $500/year and a higher mortgage rate.
    My advice is to shop around and go with the lowest rate that has the options you need (eg offset, fixed).

  • What do I expect from my home loan provider?

    The ability to check my balance online.
    No monthly account management fees.
    The ability to make payments from my bank account directly into the loan account when I choose and NOT being compelled to pay by automatic direct debit.
    Interest calculated daily and debited monthly.
    A low interest rate.
    Requiring buildings insurance is usually required to protect the loan provider but I want the option to choose my own insurer. I do not want to be compelled to take their overpriced insurance.

    Nice to have…
    The ability to make overpayments and be able to withdraw those overpayments at a future date or some sort of offset feature. This usually means paying a monthly fee or paying a higher interest rate which conflicts with my essential requirements so I would need to evaluate each offer.

  • Excellent question. Shopping around for a mortgage recently the cheapest one offered was through St George. I understand from my online research that they are not great to deal with and have no local branch where I live, however their loan offer was much cheaper than the next in line (Bank West), probably saving me a few thousands over the course of 5-10 years that I can reasonably expect to stay with them. I chose to go with the savings, but I could understand someone paying more in order to have peace of mind and potentially better service.

    If you look at Product Reviews for lenders you will see what "bad service" looks like:
    https://www.productreview.com.au/c/home-loans/4.html?sort=it...

  • Hi Sofie

    I enjoy reading your candid responses here. Do you have an email where we can discuss mortgage options? Happy for you to pm me.

  • money is money, doesnt matter where it's from

    get the best rate

    what service do you need from a lender? the lender willing to lend you the most money for the lowest cost of funds

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