Time to read : 2 Minutes
Are Quick Home Loans Safe
The rise of online-only and alternative lenders means there’s a much broader suite of home loan offerings than in decades past.
🙋So with 10-minute home loans becoming the flavour of the month, are they actually safe or are they a quick way to lose money – and damage your credit score?
What’s your situation?
The answer to any question about buying property right now lies in another question: what’s your personal situation? With property prices dropping and a rising number of owners with distressed properties, now could be the ideal time to buy.
But ask yourself a few questions before you dip a toe into the 10-minute home loan market:
How fast do I really need to move when getting loan approval?
What’s my borrowing power like now, in the wake of consecutive interest rate rises
How much do I need to share with one (or in all likelihood multiple) lenders for a quick online home application?
Personal ID.
Income statement.
List of expenses.
And more… so is it really quick at all?
🔍 How many quick home loans is too many, especially with it potentially affecting my credit report?
The pros and cons of quick home loans
There’s no one-size-fits-all answer to whether or not you should apply for a home loan through an express online lender. It will depend on your financial situation, whether you care about going with a non-traditional lender, and how much stock you put in the security of quick home loans.
💻 And with the recent spate of cyberattacks in Australia, you might want to be cautious about who you share your sensitive information with.
PRO: Online-only lenders don’t have overheads like physical shopfronts and maintaining ATMs, so they can pass those savings onto customers.
CON: Alternative lenders typically have a limited number of financial services offerings compared to the big end of town (e.g. traditional banks).
PRO: If you find the home of your dreams, getting pre-approval in a matter of minutes could help you seal the deal before someone else snaps it up.
CON: 10-minute loans are really only useful for ‘basic customers’ with simple borrowing needs.
The bottom line
Ultimately, whether it’s a Big Four bank or an online-only lender, they all want the same thing: a borrower who will pay off their mortgage without any hassle.
If you don’t need loan approval immediately, use a calculator instead of a quick home loan service.
Any time you use a 10-minute loan service, it will be registered on your credit report – and too many applications can raise eyebrows for lenders.
If you have outside-the-box borrowing needs, a ‘quick’ home loan service can end up taking just as long as going through more traditional means.
🌈 The good news is that you have plenty of options at your disposal. Online or traditional, if you want to get into the property market then you can pick and choose how you do it!
Read more:
One million Aussie homeowners ARE already in financial distress
How much more mortgage misery will Australian homeowners face?
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Financial Disclaimer:
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
