Why Changing Lenders at the last minute was the RIGHT move for these clients….
Changing lenders doesn't always save you money.
But sometimes the difference between lenders can be significant.
We recently worked with first home buyers who had already received an approval from one of Australia's major banks.
They were building their first home.
The loan was approved.
The construction contract was signed.
The land had been purchased.
But there was a problem.
The loan structure was expensive.
The original loan was around 91% LVR
The bank's valuation came in below the total cost of the land and construction.
That pushed the proposed LVR to approximately 91%.
At that LVR, the clients were looking at around:
$50,000 in LMI
The interest rate offered by their existing lender was:
7.49%
For a family with two young children, this was a significant cost.
But the clients had already received an approval.
So why change lenders?
Because an approval isn't necessarily the best loan
We reviewed the application from scratch.
Rather than asking:
“Who will approve this loan?”
we asked:
“Which lender can structure this loan most effectively?”
That meant looking at the entire application.
We considered:
The valuation
LVR
Construction costs
HECS-HELP debt
Savings
Income
Servicing
Interest rates
LMI
Lender policy
We found another lender that could structure the application differently.
The new lender reduced the LVR to approximately 89%
At first glance, going from 91% LVR to 89% might not sound like a huge difference.
But in this case, it mattered.
The estimated LMI reduced from around:
$50,000
to approximately: $30,000 - AND a lower interest rate.
This wasn’t a question about getting the loan approved this was a question about which lender does it better!
Mortgage options aren't one-size-fits-all. Whether you're buying your first home, upgrading to your next, investing, or refinancing your existing loan, you've got options.
One bank can offer you what one bank has. We give you access to choice.
So get the right people in your corner. Because when it comes to your mortgage, we'd rather have options on the table than all your eggs in one banking basket.
