Home buyers can save $100K on loans

Written on the 27th of January 2009

A new internet site promises to reduce mortgage stress by drastically simplifying the loan-application process and giving home-buyers and refinancers access to significant savings.

BidMyLoan (www.bidmyloan.com.au) allows applicants to place bid requests online in a single 10-minute form without disclosing their identity to the lenders. Within 48 hours, applicants are emailed bids from a panel of 19 banks and lenders.

BidMyLoan isn’t a mortgage broking service: it’s a technology. Declan Murphy, founder and CEO of BidMyLoan, says this key factor gives the web-based service distinct advantages over those provided by brokers – lower up-front rates, no trailing commissions, and immediate access to many lenders.

“BidMyLoan can offer better rates than brokers. Lenders who use brokers also use BidMyLoan, and some low-cost lenders who can’t afford to deal with brokers use us.

“BidMyLoan doesn’t charge trailing commissions – and applicants can negotiate rates with lenders direct through its online messaging system. On a $450,000 home loan, this could result in a $100,000-plus saving on a standard rate over 30 years.

“This is a third-generation home-loan service: first there were banks and other lenders; then there were brokers – now there’s BidMyLoan,” Declan says.

“BidMyLoan streamlines the home-loan process by putting borrowers directly in contact with multiple lenders – and it is committed to responsible lending,” Declan says. “It ensures the loan is negotiated by the borrower and lender, who carry a risk if something goes wrong. The experience out of the US highlights the risks when loans are sold by individuals who have too much to gain by writing them.”

Using BidMyLoan, 26 year-old Wollongong resident and first-home buyer Peter Nyers chose a loan that saved him 0.75 per cent on the best offer he could find previously. “We’re just amazed at how much time and money this has saved us,” he said. Mr Nyers is expected to save $2160 per year – a total of $64,800 on his 30-year loan.

In a May 2008 survey of home-loan seekers carried out by Once Online, BidMyLoan’s related company, 63 per cent of respondents said they didn’t feel knowledgeable about the home-loan market. While there are plenty of research tools on the internet, BidMyLoan is the only site that offers the complete end-to-end home-loan service.