Lately the Team’s noticed some really interesting stuff, which I thought I should explore, explain and share so even without flongle you can DIY and cut your costs too. So here goes.
…the most interesting fact is the number of contests we see where the Top deals are the same loan type coming from different lenders AND different brokers
This goes some way to explaining why our customer’s contests are commonly producing apple for apple savings of $4,000+ over just 5 years compared to their Current Best Deal, although these 5 year savings get as high as almost $17,000 for a $600K loan (i.e. a reduction in mortgage costs by as much as 12% over the next 5 years).
It’s important to understand that the discovery of significant savings is consistent regardless of whether our customers previously used a mortgage broker or they are quoting the latest lender advertised rates like 4.65% (4.66% comparison rate). That means you can probably make those savings too.
These last two statements MIGHT seem too good to be true – until you properly understand where the savings are coming from and how you can get them yourself with or without flongle. Which is why I always say, “If it sounds too good to be true, make sure you understand everything about it, before you decide what you should do”… AND…
This article will teach you some important bits on what to look for and how to access similar savings yourself by going the DIY route if you’d rather not run a mortgage contest.
Remember, you can contact me here anytime if you want to know more, no matter what your question is.
So where are the savings coming from?
There is no simple answer, except to say it’s a mix of rates, fees, charges, discounts and concessions. I hate giving this answer, because I feel like people who don’t understand mortgage costs think that I’m dodging the question, however the data and the math shows that each of these produce different outcomes for each individual borrower. While we can split hairs about words and impressions, math is arguably our most reliable and pure science – albeit boring and over complicated for many. That latter bit is why I consistently argue that standardised TIC (Total Individual Cost) based comparison is the best way to compare deals. Anyhow, back to the main topic…
The most interesting fact is the number of contests we see where the Top deals are the same loan type coming from different lenders AND different brokers.
Now it’s important to consider that our Verified Bidder Network consists of 65+ different mortgage broker and lender businesses. Because these businesses know their deals are impartially analysed by flongle, they are no doubt, the more competitive players in the market. However even picking just one from even our network without any real prior knowledge of what they offer, means your odds of striking the right one is something like 20 to 1.
Where most borrowers go badly wrong
In our recent survey, we discovered that 67.5% of borrowers only met with one broker before choosing their loan while 30.1% only spoke with two or three and this quite simply means that almost everyone of those borrowers faced odds greater than 20 to 1 of getting anything like the best deal. The cost of that mistake is thousands in the first few years, but that cost continues to grow over time.
Meanwhile, three different independent studies including a broker poll of more than 1,000 brokers conducted by independent researcher Fujitsu found that most brokers use 4 or less lenders while more than 10% of mortgage brokers us only use 1 or 2 lenders.
This explains a lot about our customer’s typical contest results. For the most part, although a broker’s knowledge might be better than your own, each brokers individual knowledge of deals available from different lenders, credit policy (which affects whether you’ll get the loan and some of the fees you’ll pay) and their ability to negotiate better deals (buying power) is very limited.
And far more limited than most people realise, which is probably why Mortgage Choice has added:
“Not all brokers sell the products of all lenders” – Mortgage Choice fine print recently added under it’s lender panel.
It means they can advertise a lending panel like this:
… when your Mortgage Choice mortgage broker’s main lenders can be this:
So what’s the answer?
- Get independent help understanding different features and how they can save or cost you. Click here for free video tutorials in our contest maker;
- Go Open Market – Consider and contact lenders BEYOND mortgage brokers;
- Meet with multiple lenders and mortgage brokers;
- Explain your situation fully;
- Get quotes from each lender and mortgage broker for the Total Individual Cost of your loan based on your budgeted repayment for their Top Deal/s;
- Get at least 6 quotes from each broker so you can see which lenders they prefer and what deals they can/are willing to cut for you. Click here for a FREE KeyFacts standardised quoting tool to keep things apple with apple.
It sounds like a bit of work, but remember, there is a lot of money at stake and you have worked hard for that money, so you really deserve to get the best out of every dollar.