Often people think that an adviser just helps you get a home loan, but they can help you manage your home loans too.
Manage Your Home Loans Better
Most of us know that we could manage our home loans better, but don’t quite get around to seeking advice and making changes.
Having a good adviser is a great way to ensure that you make those changes and stick with them.
Often it’s the little changes that can help you pay your mortgage off faster which can save you a lot of money.
The best thing is advisers can generally work with you at no charge as the banks and non-bank lenders pay them.
Banks Make It Easy, But …
Over recent years banks have focused on making it easier to adjust and refix your loans through your internet banking or phone App.
They have moved away from providing face to face contact or advice.
Have you every wondered why?
We know that banks continue make huge profits even as they are reducing services and shutting branches,.
Automating systems is cheaper for the banks and removing the advice has meant they can employ basic transactional staff without the need for highly qualified staff.
They also understand that Kiwis have the “do it yourself” attitude and so have developed the systems to allow people to to make small changes themselves.
But in doing all of this they have also noticed that many people just accept what they are offered and this helps the bank make even bigger profits.
Consider this; you can refix your $400,000 home loan directly on the bank App at the 2-year rate of 2.59% which seems like an okay rate, but an adviser could have got you 2.45% for the same loan at your bank. By doing so you are paying 0.14% more than you needed to and are helping the banks profits. You are paying $560 more than you really should, and if the bank do this to ‘say’ 2000 customers then they will add over $1 million to their profits.
Do you really believe the banks will put your interests first, or will they be looking after their shareholders?
What Can Advisers Help With?
It’s always good to have someone independent to your bank or non-bank lender that can help you with your lending and is there so you can ask questions.
A mortgage adviser can help with your existing loans, but will also provide advice if appropriate on other options that may suit you.
Of course bank staff will focus on their bank product regardless if there is a better option for you.
There are many reasons people have to use a mortgage adviser and they may not be what you would typically think.
Professional Advice – experienced mortgage advisers are able to give you a lot of good advice. Often the advice will not be something obvious to you, but instead will be advice that a broker can provide once they understand your situation. There are many examples of this from our office alone and often this free advice can save you many thousands of dollars.
Other times the advice is very obvious. You may have some questions to ask and the bank staff at the counter or at the call centre are either unwilling to provide the answers to your questions or do not know the answer. This is often the case with self-employed people or property investors where things can often be more complex.
Sometimes the advice given by the bank staff is wrong due to limitations with their own bank product. As advisers we are constantly hearing of people that have been told that they “cannot borrow the money” when it’s only that the specific bank is not able to provide the money, when another bank or lender has not got the same policy.
A Point of Contact – in the past people knew people at the bank that they could go and talk to for advice, but also to ask those simple questions. The banks tended to have good front-line staff as most transactions were done over the counter and the banks knew the value of having good personal service. Well things have changed and now the banks are focused on automating as much as possible and removing that personal contact – its cheaper so adds to their profit. There are still some good staff at the banks, but many of them are now not working at the counter or at a branch level. People are always having their personal bankers or business bankers replaced and it’s hard to build any relationship with them. This is where mortgage advisers are able to add a lot of value. A mortgage adviser is generally committed to being in business for a long time, and good mortgage advisers know the value of being available too.
Choice of Loans – the best loan that any bank can offer you is that banks best loan whereas a good mortgage adviser has access to, and knowledge of a range of bank and non-bank lenders. This enables a mortgage adviser to source the most suitable loan for your specific situation.
Choice of Banks and Lenders – as mortgage advisers we have a choice of banks and lenders and will use the bank or lender that is going to be best for you. We do not exclusively favour a specific bank or lender as they all have slightly different policy and therefore suit different situations. Often when someone has more than one property then we will suggest using more than one bank, or when there is a specific requirement then there may be a bank or lender that suits you better.
Loan Structure – is one of the most important considerations when you want to save money, pay your mortgage off quickly, restructure other debt and of course have the flexibility to enable your lending to meet future needs. In our opinion the banks are not very good at suggesting loan structures to suit you and tend to be more focused in what suits the bank and what is the easiest for them to process.
Debt Consolidation – sometimes it can make a huge difference to get rid of expensive debt and consolidate it into a home loan, but you need to do this correctly to ensure that your overall debt level does not increase. It’s better to manage this so that the loan term matches what the debt was used for rather than spreading the repayments over a longer and easier term.
Competitive Interest Rates – some mortgage advisers try and say they will get lower home loan rates; however that is not always the case.
To get the lowest interest rate would see you changing banks continuously and that’s not going to save you money. Instead we believe it is more important to have competitive interest rates on a consistent basis. As mortgage advisers we are dealing with a number of banks and so know what they are prepared to offer (which is often better than the advertised rates or rates that they will automatically offer) and that makes it easier for mortgage advisers to negotiate home loan rates on your behalf.
It Costs Nothing To Ask
Ask the team at Mortgage Managers to have a look at your home loans.
It costs nothing to ask for a review and you may find that there are some changes that can be made that will really help you manage your home loans better.