Delaying a review of your home loans is costing you money. Stop putting it off!
28 February 2018 MO'R Mortgage Options
We all put off the things we need to do. Reaching out to that person we haven’t spoken to in ages. Weeding the garden. Finding ways to save money.
Yep, we’re guilty of it too (at least the first two anyway)!
There’s always a stack of articles floating around this time of year ‘revealing’ the best ways to save money. Surprisingly though, ‘reviewing your home loans’ hardly ever makes the list.
This makes absolutely no sense to us! The latest Census data revealed Canberrans spend almost 23% of their income on mortgage repayments. So, if you really want to save money then, surely you’d be better off looking at the biggest monthly expenditure first… i.e. your mortgage?!
But we’ve noticed that when people are trying to save money, their first step is to cut back on coffees or reduce the number of dinners out. These are ok steps to take (if you can handle it!), why not do something that has the potential to have the biggest impact on your bottom line?
Despite the fact we’re always talking about it, we wanted to know why more people don’t actively review their home loans.
So, we asked around.
Here’s the best reasons (*cough* excuses) why borrowers choose not to review their home loans. Let us know if we’ve missed any!
I don’t have time to review my home loans
We completely get it. We’re busy ourselves juggling work, family and life in general. Particularly when reviewing your home loans just sounds like a whole lot of extra work.
But here’s the thing. You actually don’t need a whole chunk of time. We do the work so you get the benefit.
Plus, if we set up your loans not that long ago, we already have a lot of the information we need. We’ll just need you to update a few details before we can get to work looking into your options.
And if it’s been some time since we saw you last, 10 minutes is all you need.
You don’t even need time to come in and meet with us – if you don’t want to. In a lot of cases, clients prefer to work with us via email or phone anyway – we’re here to work around you.
I don’t think you can save me interest on my home loan
Here’s a few savings opportunities we identified for clients recently:
- By making a few tweaks to existing CBA loans (no refinance involved), clients will potentially save just under $4Kp.a interest
- By refinancing to a new lender, clients will potentially save $5.7K interest costs – in the first year alone
- By restructuring a number of investment loans, we found a way for clients to potentially save $36K interest over 3 years
- By refinancing to a new lender, we found a way for clients to reduce their monthly commitments AND reduce their debt by 48K over 2 years.
It can’t hurt to look over things.
What would you do if we identified an opportunity for you to save money?!
Pay off your home loan faster? Take a family holiday? Hire a cleaner?
ANYTHING is better than voluntarily paying more for your loan than you need to.
I’m not interested in buying another house
That’s fine, it’s not what a home loan review is for anyway.
We will go over your current situation with a fine-tooth comb to check that the loan you have (and the rate you’re paying) is still competitive.
Don’t pay for loan features you don’t need or stick with a loan you’ve outgrown because it seems easier. Paying more than you have to over a period of time, is never the easy option.
I like my internet banking setup, therefore my loans are fine
We’re thrilled to hear you’re happy with the service your lender is providing. It’s music to our ears – especially if we helped establish your loans initially.
However, you still need to review your home loans.
1. Lenders often provide special offers to new borrowers but don’t extend the same offer to you – their existing client
We know it’s unfair, but it happens. The best way to combat this is to regularly review your home loans to ensure you’re not missing out on savings.
It doesn’t always mean refinancing away from the lender you know, either. Sometimes saying the right things to the right people can result in you paying less interest on your loan. We can help with this.
2. A lot can happen in 5 years
Your income may have changed, your family may have expanded, you may even be sporting a new hair style. As your personal situation changes, your home loan needs change too.
We’ve also seen significant changes to the lending environment. Just because your loan was the right one for you 5 years ago, doesn’t mean it’s still the right one for you today.
3. Do you have plans for the future?
If you have ANY plans for your future – upgrading your home, moving interstate, travelling around the country for 6mths, setting up a business – there are generally things you can do RIGHT NOW to prepare for that.
Your future plans don’t even have to revolve around property. Reducing your monthly financial commitment and paying off your home sooner can have major lifestyle implications. It’s about so much more than a home loan.
We’ve met so many clients, who would have benefited from talking to us a few years earlier. You have absolutely nothing to lose by starting a conversation with us now.
Are you really going to put off reviewing your loans (and therefore say no to the possibility of saving money), simply because you like the way your internet banking works? You might not even need to change lenders!
I’m comfortable meeting my repayments
That’s great! And it’s just what we’d expect to hear.
You might not *need* to save money on your loans, but wouldn’t it be nice to keep a little more in your account?
If you wanted to buy a car and it was on sale, would you offer to pay full price for it? (P.S Did you know we can help with vehicle finance?)
Just let this sink in for a minute…
Borrowers who can comfortably manage their loan repayments tend to pay more than they should, simply because there’s never an urgent need to review things.
We really hate to see borrowers pay more than they have to, especially when we can do something about it.
So… reach out to that person you haven’t spoken to in ages (i.e. – us!) and give us a call.
Who knows… maybe after we review your loans, you can pay someone to do the gardening.