Australia’s number 1 property website, realestate.com.au (a website many people use to search for property listings on the market), has just entered the Australian home loan arena through a partnership with NAB. Owners of realestate.com.au, the REA Group, chose to enter the home loan market as a way to diversify and grow revenue for their many shareholders. Called ‘realestate.com.au Home Loans’, will this digital heavy finance service be suitable for first home buyers? We take a closer look.
There is simply no denying that Australians love spending time on Australia’s two biggest real estate portals – realestate.com.au and Domain. Realestate.com.au is part of the REA Group, which is listed on the Australian Stock Exchange (with News Corp Australia being the main shareholder). Domain is owned by Fairfax.
There is also no denying that realestate.com.au has a deep and expansive digital team (plus a clever marketing team). So it should come with no surprise that the brand new home loans section of the website is very glossy, easy to navigate and easy to understand.
“The web pages of realestate.com.au Home Loans are very glossy & look appealing”
The home loans section straight away talks about the benefits of using them to obtain a home loan and encourages browsers to start a ‘conditional approval application’ immediately.
Some of the benefits of using realestate.com.au Home Loans include:
- Get a quick conditional approval through a hassle free online experience
- See your conditional approval on your realestate.com.au login / account whilst looking at online property listings at the same time
- Options to complete your home loan application online, over the phone or face-to-face with a local home loan specialist
Sounds pretty good doesn’t it? Especially the part of being able to see your conditional approval next to the property listings you are browsing on their website – we must admit, this is a unique feature that appears to be very convenient.
Or is it??
We must admit that this sounds great and convenient on first look. But there are some very important reasons why first home buyers might not want to go with realestate.com.au Home Loans.
The main problems are:
- The online conditional approval is with NAB as the loan funds originator. There is no such thing as ‘one loan product or bank that suits everyone’. Everyone’s circumstances and wants are different. Each lenders product offerings, product prices and assessment of someone’s eligibility for a home loan is different (and the list of items is extensive). You could apply through the REA website only to get a ‘decline’ outcome when you could be eligible for a home loan elsewhere. Or you could get conditionally approved for a home loan that is not suitable for your needs or has a higher interest rate than you need to pay. Some examples of problems with NAB home loan products include a maximum lending amount of 95% of the property value (whereas some lenders allow a little bit more in some cases), a maximum lending amount of 90% if it is a construction loan and if you want your parents to act as guarantor on your home loan, they will need to be a NAB customer for this to be granted.
- While through the service you can opt to speak with a Mortgage Broker face-to-face whom can help you compare options, guess what? The Mortgage Brokers credit license and aggregation (platform) provider is called Choice and Choice, well don’t be confused by its name, Choice is owned by NAB! These Mortgage Brokers can help you compare some options from several lenders, but the panel of lenders they can choose from is relatively small compared to other Mortgage Brokers (e.g. FHBA Mortgages). In addition, Choice Mortgage Brokers could be influenced to recommend NAB related products first.
- A fast conditional approval sounds pretty handy – even the realestate.com.au website states “the kind you can use to bid at auction with, or make an offer on the spot — giving you the confidence to move forward”. Clever REA marketing again, that sounds great. The problem is, other than automatically being with NAB as stated above), not all pre-approvals are the same. The online one provided by realestate.com.au Home Loans comes with plenty of conditions (clauses) such as proof of details that you have provided (you better make sure you answer those online questions correctly!) and are subject to the property you eventually purchase meeting their lending criteria. There is no obligation whatsoever on realestate.com.au Home Loans to provide you with a home loan. Clever marketing? We think this wording is borderline ‘misleading’ advertising!
Is realestate Home Loans suitable for first home buyers?
Why FHBA Mortgages is ‘simply’ better (yes we are going to be cheeky and put this up, because we want you to know!):
- At FHBA our Mortgage Brokers have access to far more home loan providers (and products) than the REA Home Loans offering. This means we are overall (in the vast majority of cases) more likely to find a home loan option that is suitable for you (and also more likely to find you a loan that is lower in cost – for example, a lower interest rate).
- Our mortgage broking service is provided by credit qualified FHBA Coaches who can also assist you with other components of the buying a property process.
- We are not owned by any major bank or financial institution (and neither is our Credit Licensee, Mortgage Australia Group). We are driven by helping first home buyers find a great deal for their situation so they can make their home ownership dreams come true.
- We too offer assistance with home loan pre-approvals, but our pre-approvals are more reliable than the basic ones provided through the realestate.com.au website. At FHBA we can help you obtain a pre-approvals with less conditions and clearly advice you of what each lenders property lending criteria is in advance so you don’t waste time searching properties that banks may not lend you the funds you need in order to make the successful purchase.
- Exclusive access to the FHBA 50 Rebate* (in addition to government incentives for first home buyers, such as the First Home Owners Grant*).
- We are Australia’s number 1 first home buyer specialists – all we do is help fist home buyers all day, everyday and we like to think we are pretty good at it. Individual Mortgage Brokers associated with realestate.com.au Home Loans are associated with assisting other clientele and wouldn’t see as many first home buyer scenarios as our individual Mortgage Brokers do. In addition, Mortgage Brokers that are not first home buyer specialists are generally known to not priortise first home buyer clients because they typically mean more work and less pay to them.
Ok, we must admit with our pre-approvals you can’t see them conveniently on your realestate.com.au login. But is it really convenient being able to see the realestate.com.au one if it comes with such a high list of conditions?
It is just one number. If we assist you obtain a comprehensive pre-approval for say $400,000, do you really need to have that number appear next to every property listing, or do you think you will be able to manage righting it down elsewhere and remembering it? We can even put it in writing for you if you like……
But of course you would say that
Think this blog is a little too biased? We invite you to find out for yourself – at no charge! If you are in the market for a home loan or want to work out your ability to obtain a home loan approval (or maybe you just want to know what your current borrowing capacity levels are?) – get in touch with us for a complimentary, no obligation FHBA Discovery Session.
One last word – as a business, we are not worried about REA Group entering the home loan market, because when it comes to helping first home buyers we know we are better (and we promise to always be better).
First Home Buyers Australia