I was having coffee with the CEO of one of the larger Melbourne based financial institutions early last year. I was talking to him about our ambitions for Joust and he said something that really resonated with me. He said “Housing Loans are NOT complicated. If a house is worth $800,000 and a customer has $400,000 of equity – the customer needs $400,000. “
Banks get involved in lots of complicated transactions and products but the basic home loan, should not be one of them. Home loan opportunities such as the one the CEO described above are absolute “gold” for Banks. They often take a minimum amount of credit assessment, carry a minimum amount of risk, Banks are excellent and well set up to do the fulfilment and there ought to be ample opportunity for Banks to offer other products to the new home loan customer.
However, until now, it has been a bit daunting and/or confusing for consumers to know where to start to try to find out if they could get a better home loan interest rate. The top six reasons until now are described below:
1) I haven’t got time. Many of us don’t have the free time to undertake the research, analysis and negotiation required to refinance our home loan. Comparison sites are a maze of brands, packages, specials and numbers. Sometimes you feel like you would need a science degree to work out what it all means. Approaching a Mortgage Broker to do all this research and negotiation on your behalf, sounds fine but the lack of transparency around Mortgage Broker recommendations continues to be a concern in the home loan sector. Media coverage and public enquiries continue to draw attention to these challenges.
2) Where would I start? Unless you have a terrific Relationship Manager at one of the Banks, or a close friend who is a Mortgage Broker or an Accountant, it is not obvious where a customer should begin the process of refinancing their home loan to reduce their monthly loan repayments. More and more, people are turning to the internet to commence their journey for goods and services. Researching home loans can be almost an infinite process if you don’t know where to go.
3) I don’t want my personal details shopped all over town. Many consumers are understandably sensitive about their personal data. Whether it is filling out forms with Banks or Brokers or keying in data on-line, consumers want to know that their personal data will be protected and always handled and used only in the manner that it was intended.
4) I don’t want to be hassled by Banks or Brokers phoning me and emailing me incessantly. One of the draw backs of beginning the enquiry process for a home loan refinance – is that in a lot of cases, as soon as a service provider gets a sniff that you might be intending to do something – they bombard you with unwelcome phone calls and emails.
5) I actually don’t enjoy bartering or haggling. Many Australians don’t enjoy the “argy-bargy” of negotiating with lenders or brokers for a better deal. It can feel a bit unnatural for many of us and creating the right level of competitive tension often involves a degree of unwanted pressure.
6) How can I trust a middleman to truly get the best rate for me? Without competitive tension, lenders tend to apply their own standard rates to all home loans. With many financial institutions, one person gets exactly the same home loan interest rate as the next person – despite the fact that the person’s credit rating, income, equity, occupation or location of the property may be very different. Mortgage Brokers have been telling us for many years – it is unlikely that a Bank will contact you and say – “hey – we could give you a lower home loan interest rate.” However the preferences and opinions of a mortgage broker may not always be in your best interest, and various incentives may direct them down one path or another that is not always fully transparent.
But all is this is about to change for the better. Joust takes approximately 3 minutes to input the details of your existing home loan. Joust is now the logical place to start for all good consumers with an existing home loan. Your personal details are only provided to the ONE winning lender that you select at the completion of your Joust. No one other than the lender you have selected will follow you up by phone or email. Joust creates the competitive tension across its panel of lenders – instantly and live. With Joust – there is no intermediary, lenders are bidding for your business directly to your mobile phone, tablet or computer.
Joust Managing Director Mark Bevan