Frustrated Broker…

It is the perceived hassle and fear of things going wrong. Almost – better the devil you know.

There have been heaps of studies about this. They all confirm that the majority of people are not happy with their provider but they just won’t change. People are very sticky to their banks. There’s is nothing you can do about it really.

Cheers

Stu

The cheapest loan is not always best!

Terryw
Discover Home Loans
Mortgage Broker
Click below to email me

Hi Rob,

Speaking from personal experience the reason why we didn’t change lenders was my own ignorance.

Up until some time ago when my learned broker corrected me I was under the misunderstanding that if I refinanced I would also be up for ‘purchase’ stamp duty as well as mortgage stamp duty.

Thankfully I did listen to my broker, changed banks, got a better product and have moved on significantly from that.

Derek
[email protected]

Property Investment Support Available. Ongoing and never stopping.

Some States have abolished mortgage stamp duty, Victoria July 2004 for instance, while others have concessions in place, 1st Home buyers/owner occupied etc.

Regards
Steven
Mortgage Broker
Mobile Mortgage Market

[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIA

PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.

Sorry, I have just re-read your initial post, and you say why do they stick with it AFTER they have been made aware it’s a lousy deal. Not so sure about that – Laziness??

I beg to differ: I was fortunate enough to take out a loan around June 2003 fixed at 5.74% for 5 years, and wish I had refinanced all my other loans then. Why didn’t I? Complacency, not bothering to check what my old interest rates were, compared to the new rates and the fear of the high cost of refinancing fixed loans, fueling my complacency. Not that I ever bothered to check how much EXACTLY it would cost to refinance. That “economic cost” clause is intimidating, until you ask for the dollar value!

Tanya Forlani

Dear Rob,

I agree with your statement that a lot of people stick with old deals even though they are loosing money. I think it is because they are ignorant or they are scared of new things. We changed our loan recently and have a good interest rate and good service as well,the bank branch is close to us which was wery important for us because we needed to withdraw larger sum of money ‘then and there’.Flexibility is very important when I make decisions about my financial institutions as well as professionalism and staff knowledge.

Marija[confused2]
[confused2]

I am currently in a loan that charges 8.45% interest. It is a total rip-off, and the sooner I can sell and get out of it the better. There are a few of reasons I have not refinanced:

1. I found a couple of deals with good fixed and variable terms, but the valuers the finance companies used (in my opinion) undervalued the property and won’t shift on it. I would be forced to pay around $3,000 mortgage insurance up front.

2. To exit the current loan, I have to pay 1.5% exit fee in this first 12 months. It will be bad enough to have to pay 1.25% when I finally do sell.

3. I am now planning to sell in a few months anyway, and the costs of refinancing are not worth it if I am just selling soon anyway, with extra early exit fees etc.

The reason I took this loan in the first place was to get into the market with no deposit. I got 100% finance, and used my FHOG plus a Defence Force grant to cover my costs. It got me a foot in the door to the market, and if the realestate agents who’ve valued the place are right, I should be able to sell and come out after costs with anything between $15k and $30k. Those funds will then go into purchasing some +CF IPs.

One thing that really irks me about this loan is that the exit fee is for the full amount borrowed, not for the amount left owing. This doesn’t allow me to use a strategy whereby I get an unsecured personal loan as big as I can, and put it on the mortgage the day before I pay out, so as to pay exit fees on the then lesser amount owing.

Looking back now, I really think I could have done better through a different broker. The whole process of getting the finance approved was a total nightmare, and caused me months of angst and heartache. Being my first property purchase, it was definitely a steep learning curve, and there is no way now that I would ever put up with the sh!t that I did with this lender ever again, from anyone, for any reason.

And that’s really what it’s all about, isn’t it? Making mistakes and learning from them. Hopefully, though, next time, I will be a little less niaive and do a bit more research.

Kez