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Tuesday, February 19, 2008

Home loans go under hammer online

The Internet is proving to be an exciting new frontier for property transactions. Going beyond websites that highlight the best buys, homebuyers can now take a virtual seat and participate in real-time auction happenings over the worldwide web.

Some of these sites are so creative that houses are even offered to the lowest, unique bidder! Thus, by law of natural progression, it comes as little surprise now that home loans too are being put under the hammer in cyberspace.

Believed to be the first scheme of this kind in the world, and not just over the Internet, New Zealandbased website has hundreds of Kiwis rushing online to auction their mortgages to the best home loan financial institutions can offer. Put simply, lenders compete directly for the borrower’s business.

According to the site’s webmasters, Fundit aims to help borrowers, first-time homebuyers and property investors by arranging online auctions and attracting banks and other lenders in the market to bid for their business.

And the website says it has already conducted more than 500 such auctions since it was launched last year, all of which have proven successful.

The financial institutions currently bidding online with Fundit include established names such as the Bank of New Zealand, Kiwibank, First Mortgage Trust, Loan and Building Society, Southern Cross Finance and Southland Building Society.

The Bank of New Zealand, which has been a significant participant in these auctions, reported a surge in its share of the mortgage market since the website was launched.

Property experts in the country are also giving the concept the thumbs up, saying the scheme challenges mortgage brokers as New Zealand’s property market continues to tighten.

Fundit arranges the auction process at no charge to the borrower, and online, they can see lenders compete directly for their business.

A former chairman of finance agency Mike Pero Mortgages, Abigail Foote, described Fundit as “a fresh approach to finding a home loan at a testing time in the property market”.

“The housing market is becoming tighter and I believe this will give homebuyers an edge they need to get the best mortgages out there... lenders who aren’t on emerging websites such as Fundit may shut themselves out of a key part of the home loan market.” - Chris Prasad

By New Straits Times

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