Data reveals Qld homeowners could be flying blind to fees
RACQ has flagged a potential financial risk for homeowners, as new research revealed nearly 50 percent of Queenslander’s didn’t understand the fees associated with home loans.
A survey conducted by RACQ, asked Queenslanders to rate their understanding of common terms associated with a mortgage. Almost 40 percent admitted they didn’t know what Lenders Mortgage Insurance (LMI) was, and almost 40 percent didn’t have an understanding of what comparison rates were.
RACQ Bank spokesperson Lucinda Ross said it was concerning so many Queenslanders didn’t know what they could be signing themselves up for when they took out a home loan.
“The monthly, ad-hoc and annual fees associated with home loans and LMI can take a huge toll on your household budget if you aren’t on top of what they are,” Ms Ross said.
“Many Australians struggle to meet the 20 percent deposit commonly needed to avoid purchasing LMI at most institutions, but don’t realise they could be signing themselves up for a higher repayment.
“With almost one in five Queenslanders reporting falling behind on debt repayments, make sure you know what your loan truly costs to save yourself from falling short.”
Ms Ross urged mortgage holders, or those looking to take out their first loan, to use comparison sites and calculators and have honest conversations with their lender before signing on the dotted line.
“Some deals simply are too good to be true, so make sure you take the time to read the fine print to make sure that ‘competitive’ deal is truly competitive for you,” she said.
“And don’t fall into the one third of Queenslanders who tell us they don’t understand comparison rates – use free online calculators to compare rates and ask your lender the tough questions about what the hidden nasties could be.
“At a time when we’re seeing budgets tighten, don’t let yours get blown out by fees you could have avoided.”