According to a recent study from St. George bank, Australians are discouraged from applying for mortgages due to the drudgery of the application process.
The bank’s data showed that, instead of applying for a home loan, 20% of the respondents would rather visit the dentist, while 19% would opt to dine with the in-laws. Another 18% said they would prefer to sit in peak hour traffic, and 16% would prefer to endure a 14-hour flight without entertainment.
More importantly, it was found that many people will delay their plans of buying a home because of loan applications. In fact, this year’s St.George Home Buying Survey estimated that while 2.2 million Aussies plan to buy their first home in the next five years, 48% of first home buyers admit they’ve postponed buying a home because the application process is just too daunting.
The factors that dissuaded borrowers from applying included too much red tape or paperwork (25%), the idea of not knowing where you actually stand (20%), and the length of the process (20%).
It is important to note that 94% of Aussies now use a computer or mobile device to transact or avail of financial services. As such, it’s not terribly surprising that over three quarters (78%) of respondents said they are overwhelmed by the amount of paperwork involved in buying a property.
Moving forward, home owners expect more transparency around pricing and interest rates, less paperwork, quicker approval time for applications, and more information about their borrowing capacity.
In an attempt to address the aforementioned issues, St.George recently launched a new online home loan application tool to simplify the process and help educate buyers along the way.