According to a survey by my aggregator, Connective, 63% of bank customers will use a broker the next time they need a loan. Furthermore, 96% of broker customers will return the next time they need a loan.
The 90-day and 5-year swap rates are both around 1.5%, 9-year lows. Significance?
A new survey from ME revealed 94% of Australians think banks don’t act in their best interest. 95% agree banks sometimes put profits before customers and 92% believe banks sell products and services inappropriate to customers.
Jamie McPhee, ME CEO, coined the phrase ‘bank-xiety’ as a term to describe these findings of worry, nervousness and distrust towards banks.
Despite this, only 14% of respondents have done something about this and have switched or are in the process of switching to a bank they trust.
Why not let me help you consider switching?
According to Elizabeth Knight in an article in a recent SMH, “The unnecessarily high cost of price discovery is likely a key reason why 70 per cent of borrowers surveyed by one bank said they had obtained just one quote before taking out their residential mortgage, the ACCC report said.” If that is you, why not let me help you save a bundle by getting the best rate from the most hungry lender. By the way, it is not likely to be one of the big banks.
1. Doing well? Save more
When things are going well and you’re earning more money, don’t be tempted to splash out and reward yourself – keep your eye on the bigger, more important goal you care about. Stash a good piece of that extra cash. The real reward is the bigger number in your interest earning savings account.
2. Set yourself a target
Work out where you want to live first, then calculate how much you need to save for a deposit in that area – and don’t forget to add on those extra costs like stamp duty and legal fees. Remember that, depending on the product you‘re applying for, different lenders may charge different fees. It’s technically possible to get a loan with a five per cent deposit, but hitting the 20 percent target will help you avoid extra fees.
3. Watch your progress
It’s not just kids that respond to visual reminders – we all do. Make a colourful wall chart of your savings target, so it is always front of mind and you can see it grow when you add each new amount to the top.
4. Be smart with taxes
If you’re self-employed, there are tax deductions for business related expenses that can really add up to help you save. These might include things like home office expenses. To get good information about what you can claim, check out the ATO website or have a chat with a qualified tax professional or an accountant who can help.
5. Always put a little something away
A little goes a long way. When your income is different each month it can be tempting to only put money aside when you get large payments in. Everyone’s situation is unique but if you save a bit of what you earn every time you get paid, you’re always working towards your own home target and you’re getting there one step at a time, every time.
6. Protect your income
If you can’t work because of injury or illness, income protection insurance can help cover for lost income so you don’t use your deposit savings to live on. ASIC’s Money Smart website offers some good tips and information about income protection insurance that’s worth checking out. If you’d like more information talk to us today about how we may be able to put you in touch with a lender that can help if the major banks say ‘no’ to your loan application. 0419 664 186.
Disclaimer: Original content source: Pepper Money. It is designed for publication through Accredited Brokers, to provide you with factual information only, and it is not intended to imply any recommendation about any financial product(s) or to constitute tax advice. If you need financial or tax advice you should consult a licensed financial or tax adviser. The information in the article is believed to be reliable at the time of distribution, but neither Pepper nor its accredited brokers warrant its completeness or accuracy. For information about whether a non-bank loan may be suitable for you, call Don on 0149 664 186.
I’ve often advised my clients that to get the very best rate from their bank, they must threaten to leave. Banks don’t volunteer their best rates, and yesterday, I found the same is true of my Health Insurance provider. I’m now saving well over $1400 per year for modified coverage that excludes things we don’t need.
… brokers write over 50% of home loans in Australia, here’s some evidence. A recent survey showed the big banks Net Promoter Score was -10 to +3. So, there are more ‘detractors’, those unwilling to recommend banks to others, than ‘promoters’. On the other hand, Mortgage Brokers’ Net Promoter Score was +17!
The information on your credit report should be accurate, complete, relevant, and not misleading. You can get a free copy of your credit report from each credit reporting body once a year. Visit CreditSmart.org.au to find out more. If you find something that is incorrect, you have the legal right to have it corrected, promptly, for free.