If you obtained your mortgage finance through a bank, it is unlikely that anyone at the bank sat down with you, assessed your options and explained how you might be able to optimise your mortgage opportunities whilst recognising and addressing your mortgage risks. Banks don’t want their staff to spend too much time with their customers if it doesn’t add to their bottom-line. Their main focus is getting the customers on board and the loans signed-up.
Many borrowers seem to believe that the main differences between the banks are the interest rates on offer. That belief plays into the hands of the banks, which tend to sell on price (interest rate).
However, interest rates, in isolation, do not necessarily provide the best outcome. Borrowers might feel that they have the best outcome if they have a slightly better interest rate than the next bank offers. However, if their finance hasn’t been structured in a way that suits their objectives they might end up taking longer to repay the finance, and paying more interest than they need to. It is clear who the winner is in that scenario. Sure, interest rates will always be a factor in the outcome, but other things such as loan terms, relevant facilities, fixed rate term and other factors also come into the mix.
Do you shop around for better prices on other products (think fuel and grocery products)? If so, have you applied the same logic to your mortgage finance? Doing so might not require you to refinance to another bank to get a better outcome. A better solution might be available within your existing bank. If there is a better option available (either within your existing bank or with another bank), would you like to know about it, so that you can decide whether or not to pursue it?
Good Mortgage Advisers understand the offerings of the various banks that they deal with and endeavour to determine, through good questioning and active listening, which bank is most likely to offer the best outcome for their client. Sure, sometimes there might only be one option (due to the applicant’s circumstances) – but where there are several options it is prudent to recommend the bank that is likely to be the best fit. In situations where there is only one option available at the time the finance is drawn it is prudent to revisit the options a bit further down the track when the circumstances might have changed (perhaps through an increase in the property’s value, or in the household income).
Many of those homeowners (or investors) that simply set and forget their mortgage finance, only reconsidering interest rates as fixed rates expire, are doing themselves a disservice. Many are blissfully unaware that there might be a better option. Others appear unconcerned.
We offer a free, no obligation mortgage review to borrowers (essentially a Warrant of Fitness). We don’t pressure anyone into changing anything, but we do recommend changes when we believe they would be beneficial. If everything looks fine, we will say so. Some borrowers could save tens of thousands of dollars over the term of their loans, stemming from an initial 90-minute consultation in their own home.