In the recent ASIC report, Looking for a mortgage: Consumer experiences and expectations in getting a home loan, the commission laid out the steps taken in the home loan journey, while highlighting that “whether consumers are buying their first home or investing in residential property, the commitment to take out a home loan is one of the biggest financial decisions they will make”. 

The snapshot of the home loan journey provided in the report showcased three milestones as generally evident across each consumer’s journey:

1. Choosing whether to take out a loan directly through a lender or by using a broker, which often involves initial research and “shopping around”.
2. Engaging with either the lender or broker.
3. Deciding on a loan, which encompasses pre-approval, approval and settlement.

According to ASIC, consumers usually follow multiple pathways through their journey.

“At each milestone, they may stop, regress or progress depending on their individual circumstances,” it reported.

The initial decision as to whether someone would take out a loan directly or go through a broker is often influenced by experience, the research found, with consumers considering what would be the “easier” option and who they thought would be able to deliver them the most suitable home loan as major deciding factors.

The recommendations and advice that is provided by family and friends also has a heavy influence on consumer decision-making, according to the report.

It flagged that consumers who already had a good idea about the home loan they were after and valued the convenience of staying with their existing lender tended to take out their loan direct with a lender, with these individuals generally making a loan decision after comparing only a few offers.

Consumers who were less sure about which home loan would be right for them, or who were keen to access a range of home loan options without having to do the “shopping around” themselves, were more likely to engage a broker, the report continued.

“How these consumers reached a decision on the loan they would take out varied and usually depended on the consumer’s own confidence and knowledge about home loans,” ASIC offered.

It went on to say that it was unsurprising that the first home buyer journey would be distinct from that of other borrowers with previous experience to call on.