You Don't Know What You Don't Know
I like the saying “you don’t know what you don’t know” and I think that it can be applied to many borrowers when it comes to mortgages. There is a lot more to mortgages than most borrowers (or would-be borrowers) realise, and many borrowers just don't know what questions to ask. Many focus solely on the interest rate (which is understandable, given that banks tend to promote themselves on rate). However, it is not all about the interest rate, and many borrowers have found themselves in unenviable situations due to a lack of awareness of that reality.
For example, without receiving advice around the potential options, a borrower placed all of their mortgage debt on one fixed rate that was slightly better than another bank was offering at the time. However, when that fixed rate expired, the borrower discovered that the refix rates available at that time were considerably higher than the rate they were coming off. Unfortunately for them, they had no option than to choose from the rates available at that time. And those rates applied to all of their debt (ie not just part of their debt). Had they been aware of, and taken other options at the time that they initially fixed the rate, the outcome might have been quite different.
Perhaps the most valuable attribute of a good Mortgage Adviser is his or her ability to provide quality advice that could end up saving their client a whole lot of stress, time and money. A Mortgage Adviser’s ability to determine the most appropriate lender for the client’s circumstances and goals and to prepare a well-considered finance application is certainly important, as is their experience that they call on to structure the finance in the most appropriate way. However, the importance of providing quality advice (in addition to the above attributes) throughout the process should not be underestimated.
Rather than trying to make their own diagnosis of potential risks, and prescribe their own solution, I recommend that borrowers engage a recommended Mortgage Adviser with the knowledge and experience to guide them through the process. This recommendation applies to those with existing mortgages as well as would-be borrowers.
We recently ran a promotion aimed at homeowners with mortgages, encouraging them to take advantage of a free mortgage review. The results were surprising. It seems that many borrowers are indifferent to (or don’t fully understand) the fact that there could be other options (within their current bank, or perhaps with a different bank) that could potentially save them tens of thousands of dollars over the term of their loans, and shave years off their loan terms. It is important for borrowers to understand that as their situation changes (which it will) they should consider having a review, or simply talk to a Mortgage Adviser to ensure that they are taking advantage of opportunities and / or managing your risks.
We offer a free, no obligation mortgage review (essentially a mortgage Warrant of Fitness) to anyone that is willing to ask for one. We won’t pressure anyone into changing anything, but we will recommend changes when we believe they would be beneficial. We don’t know what opportunities for improvement might be available until we undertake the review, and if everything looks fine, we will say so. For those that arranged their finance through a bank, I think it would be a wise choice to give us a call (perhaps after checking out our Facebook reviews or website testimonials).