Page 34 - Smart Money

Chapter 1

they have that home loan it is forever, and don’t actually revisit their
mortgage. They could be saving money, but they are not paying attention.

On average, most people sell their homes after about four years, so
the worst case scenario is that they have a bad interest rate or a poor
performing loan for four years. It used to be that people would buy a
house and stay in that house forever. That’s when it used to be even worse,
because they wouldn’t ever revisit their mortgage. Now, statistically,
people are purchasing every four years, so it is not as bad as it used to be.

Key Point

If you don’t pay attention to your home loan, you could miss
opportunities from other lenders, and you may also miss fees that you
are getting charged that you shouldn’t be. If you don’t pay attention
first up, and know that there shouldn’t be an ongoing monthly fee -

well, you have just paid all those repayments and could have had more
money in the bank.

People with higher mortgages, say over $400,000, can save thousands
over the term of their loan just by going down by half of a percent. They
may not realise that such a small decrease in the interest rate can actually
benefit them quite significantly. The issue is that they don’t realise and
they don’t do the figures. They just let it sit there and forget about it.

I’ve had clients that were on an old product with their existing bank.
They came and spoke to me, but they weren’t in a position to refinance.
That same bank had just released a really good product. So by coming to
see me, with one email, I was able to get their interest rate reduced by
over half a percent with the same bank. They didn’t know that they could
do that.

I’ve also got a client now who is paying 5.3%, and I’ve just had him
approved for 3.99% with the same bank without refinancing. If you don’t
look at your mortgage every so often and you just set and forget it, then

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