Approval timing
If timing is critical (e.g. because you are bidding at an auction), you need to be aware of the lender's approval turn-around times.
In general, approval timing is generally going to be better with larger lenders. Smaller lenders who are offering attractive pricing are usually swamped with customers, and their approval timelines can blow out to a couple of weeks easily.
In this scenario, it is not uncommon for approval to be pursued with more than one lender (one who can get approval in time and one who can get you an approval at a better rate). You can go into an auction with confidence you can fund with approval from the fastest lender. You can then chose to settle with cheaper lender once their approval is obtained. Lenders hate when this happens, but it is not uncommon.
LoanCaddie can keep you informed of approval timelines of our lenders.
Branch presence
For most people, branch presence should be a lower order consideration. If a customer needs to speak to someone, it is far more efficient to talk to their call centre.
Gone are the days when it was important to walk into a branch and meet the branch manager and form a ‘relationship.' Let's face it; most of us don't find walking into a branch handy for getting advice. Given modern workplace mobility, it is unlikely that the person you meet in a branch will be there in 5 years time. The concept of a ‘relationship' with a corporate institution is far different from a relationship between people.
It is also a common experience that the person you meet in a branch is unable to answer your question. As a result, many people find it far more accessible and reliable to visit a bank's website or customer portal to get the information that they need.
Customer hotline
When it comes to speaking you your lender, the most common means is to call their customer hotline.
The ability to call someone when you need to and to speak to someone that isn't just reading off a script is difficult to find. Usually, when a lender has a large call centre, the call centre staff are primarily reading from scripts to maintain consistency of service.
Our experience is that lenders with smaller teams are usually able to have better conversations with their clients since their systems are not as rigid. Unfortunately, with a smaller team also come longer wait times and slower responses.
Customer service
The ability to call to someone when you need to and to speak to someone that isn't just reading off a script is difficult to find. Usually, when a large lender has ample resources so that you can call them and not wait in a queue, this means they have a sizeable call-centre workforce that is primarily managed with scripts to maintain consistency. Our experience is that lenders with smaller teams are usually able to have better conversations with their clients since their teams are not as rigid. Unfortunately, with a smaller team also come longer wait times and slower responses.
In our experience, larger lenders typically have a better online customer service while smaller lenders offer better phone service.
Trust
The importance of the lender having trust in the borrower paying back the loan is obvious.
The importance of trust going the other way is an interesting topic. We consider that it is still crucial that you have faith in a lender as they will ultimately be administering the repayment calculations on behalf of both parties. Unfortunately, even the most prominent lenders have failed at this and have overcharged customers in the past. So even thinking that a brand name will protect you will not work.
In determining trust, we consider it is essential to consider how lenders treat their customers when they stuff up. Do they automatically confess their errors, come clean and promptly compensate? Alternatively, do they hide their mistakes and wait until they are uncovered before offering compensation?
We also think it is important to consider how they treat loyal customers. Do they automatically reward loyal customers with the best rates they are offering new customers? Alternatively, do they only provide loyal customers with better interest rates when they are threatened that they will leave? Unfortunately, more often than not, lenders offer special deals only to new customers and don't allow special deals to existing customers.
Ultimately, lenders are not perfect and you can never 100% trust your lender. It is far more important that you have a mortgage broker whom you trust to keep your lender honest.
Range of other products
The products offered by lenders are fairly similar, and the need to keep your banking products in one place has diminished in recent times. There is some convenience in having all of your banking products on the same app or website, but this is changing.
In the UK, it is very typical to have products split between several financial providers. Banking data legislation has made it possible to manage products over several financial providers simply with the data being able to be held and maintained with the same spot.
We consider will Australian adopt this in a couple of years.
Hence, we do not consider the range of products of a lender that important. The only instances where this generally should be considered should be:
If you require an offset account;
You are a business owner and need to borrow money in the future;
You are unable to be offered a credit card unless it is packaged with a home loan.