Millennials have given some insight to their experiences of using brokers and how they find the home loan process too confusing.
New research has suggested that despite popular belief, millennials are keen to purchase property but do not understand how to go about it.
The research conducted by Pollinate on behalf of ING sheds light on the role mortgage brokers should be playing in helping millennials buy homes.
The Millennial Homeownership Report shows that 64% of young Australians aged between 22-37 years old prefer to plan ahead rather than live life off the cuff. More than a third, 38%, are currently saving for a house to buy in the next three years.
However, 61% said they weren't sure how much they should save for a deposit. Forty percent said this was the case even while they were saving.
Speaking at an event yesterday, four millennials joined a panel to discuss their different experiences on purchasing property and using brokers.
Dan is looking to purchase a property near where he lives in Newcastle. He commutes to work in the Sydney CBD every day but says he is looking to provide a certain lifestyle for his family and that is what is driving him to buy a home.
He said the entire process was "daunting" and added, "My first point of call is speaking to family and friends. Also, online. I think for me the first point of call is researching online, having a look at what’s available. My last Google search is what to do to buy a property. I hadn’t thought about using a broker, but who knows? In terms of knowing what to save, I spoke to a specialist."
Twenty-nine-year-old Jess is a nurse and is looking for a property to move into with her partner. Unlike Dan, she did speak to a mortgage broker but is still facing confusion.
She said, "I went to my mum’s mortgage broker that she used a while ago. We got advice on how much deposit we’d need, if she could go guarantor and how much we could borrow altogether depending on our take home salary and repayments. I don’t think I’ll necessarily go with that broker. I just wanted to keep my options open.
"When I first saw the mortgage broker he answered all the right questions but to be honest I still don’t have a lot of knowledge to go the best way around getting a home loan.
"A lot of my friends are the same, we spend a lot of our money on luxuries. So just advice on budgeting would really help millennials."
The millennials on the panel who have already purchased property said that brokers had helped them.
Lauren, 32, is a property manager from Brisbane and bought her first property at the age of 22 and another at 24. Last year she bought her first commercial property, which she now bases her business out of.
She has used brokers in the past and said, "They give you a really good understanding of how much you can actually borrow. That was my first step when I was first looking. I really needed to know how much I needed to save and what was going to be the cheapest, no frills mortgage options for me. I felt like a broker was really able to help me."
Eddie, 27, already owns 13 investment properties. He said there have been times he has used brokers and other times he has found it too difficult.
He said, "When I first started I did touch base with a fair few different brokers. One of those things I didn’t understand was the nitty gritty stuff. In terms of what can brokers do: explaining the terms and conditions of the actual loan, simplifying what words are out there. I didn’t know when I first started what LVR was.
"I touched base with brokers and I ended up going with one of the four major banks because I was tired of calling up and I just walked in and it was convenient. I did decide to go with a broker once or twice but I found it difficult and I have found most of my success with finance going to the major banks."
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