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Home Loan Lenders In Australia
By: Rod L'Huillier
In Australia there are now many different types of home lenders, each with
different interest rates, terms, conditions and lending criteria. The most
common types of lenders are:
• Mortgage Brokers
Not to be confused with mortgage managers, mortgage brokers are responsible for
introducing borrowers to lenders - they act as an intermediary offering
prospective borrowers information on various lending institutions and their
products.
• Mortgage Managers
Mortgage managers are lending specialists who arrange funding for home and
investment loans. Unlike banks, building societies and credit unions, mortgage
managers do not have a base of customer deposits with which to fund their loans
instead they source their funds via a process known as securitisation. This is a
process whereby assets with an income stream are pooled and converted into
saleable securities.
The mortgage managers job is to set up the loan and perform a liaison role with
all parties involved, namely originators, trustees, credit assessors and
borrowers. They provide the customer service role and are there to manage your
loan throughout its term.
• Credit Unions
A credit union is a cooperative that is owned and controlled by the people who
use its services. Each member is both a customer and a shareholder in the credit
union.
Deposits from members are used to fund loans to other members, with the credit
union business structure facilitating the process. Credit unions serve people
who share a mutual interest, such as where they work, live, or go to church.
Credit unions are non profit organizations, and because there are no external
shareholders there is no pressure to earn profits at the expense of customers.
Like banks, they offer a wide variety of banking facilities such as loans,
deposits and financial planning. Credit unions main function is to serve members
needs rather than make a profit. They therefore put a great deal of emphasis on
customer service and meeting the needs of members.
• Building Societies
Building societies operate in the same manner as banks and obtain their funding
primarily through customer deposits. As with credit unions, customers are
members. In a sense they own the society, which is why they are often referred
to as mutual societies.
• Banks
Australian banks are regulated by the Reserve Bank. Banks are the original
lending institutions and for the most part they source their funds through
customers term deposits and savings deposits via their branch networks.
Customers are paid interest on deposited funds and these funds are then
available to lend to borrowers. In turn, these borrowers pay interest to the
bank on the sum lent. The margin between interest paid on deposits and interest
received from loans provides banks with their major source of revenue.
About the Author:
For more information on choosing the right lender for your next home loan see
Mortgage Seek where you'll find mortgage information, home loan calculators and
a directory of lenders in Australia. |
