Hi Property Lovers
There is so much talk out there about our banks, interest rate rises, the property market..it goes on and on! I came across this article on news.com.au that I thought offered some great information:
THE banks have called our bluff in lifting loan rates by more than the Reserve Bank's official increase.
So what are you going to do about it?
Are you going to be a wimp and just cop it on the chin, as your bank is hoping, or are you going to fight back, make a point and save some cash?
The banks assume you'll whinge for a few days, do nothing, move on with your life, pay the extra and add to their profit growth.
The banks whinge about doing it tough but then produce record profits results.
They must think we're stupid. Unfortunately, the reality is they're right. There's more chance of getting a divorce than changing banks.
Our view is that you have no right to whinge unless you're prepared to do something about it.
When is the last time you sat down and looked at all the products and policies you have with your bank and how much you pay for the privilege?
The first step is to list all those products loans, deposit accounts, insurance policies, credit cards, superannuation and other investments.
Then look at the statements for the last year and add up all the bank fees and premiums deducted from those accounts.
Add up all the interest which has been paid. Then, to be fair, add the interest and investment returns earned.
Most people are amazed at how many accounts are on the list and can automatically see which obvious redundant accounts can be culled.
CHECK ALTERNATIVES
Finding alternatives and doing your comparative financial shopping is so easy online.
Our top sites are infochoice .com.au and ratecity.com.au. Both sites have extensive comparative tables of every type of loan and deposit being offered.
They also provide research on the different products and make recommendations.
These two sites are an absolute must to visit and you'll be amazed at how many options are available.
You'll also be stunned by how much extra you're paying on your current loan.
For example, did you know there are standard variable home loans on offer for between 6.3 per cent and 6.6 per cent from established credit unions and non-bank financiers?
Don't forget to read the fine print on some of these low rate loans because they can come with quite hefty establishment and exit fees.
DEMAND A BETTER DEAL
Go to your bank, talk to a bank staff member (see them in person rather than over the phone or online) and demand a better deal.
You have the facts. You know how much you pay in fees and what products you have. You've been online and researched other options, now you have to confront your existing bank for some action.
Explain that you're prepared to shift institutions but are quite happy to stay if they sharpen their deal to match what you can get elsewhere.
Banks know it is better (and cheaper) to keep a good existing customer than go and find a new one.
Don't be shy. Be confident, be forceful but be professional.
VISIT THREE OPTIONS
It's all very well to talk and research, but doing is totally different for most people.
Contact or visit three other financial institutions to discuss your requirements and the process needed to make a change.
Explain what a good customer you'd be, you're annoyed with your existing bank and how you're ready to change. But still try for a better deal. Sure, you've been attracted by the advertised rate on offer but still ask whether they can do even better. They can only say no, so it's definitely worth a try.
BE PREPARED TO CHANGE
Crunch time. You have the facts, researched the options, discussed it with the bank and talked to the alternatives.
The bank won't budge and you're fed up.
It's time for action and that can be scary.
But it's mostly in your head. Be confident.
You've done the homework, you know the options available, so back yourself.
FOCUS ON YOUR DEBT
With interest rates likely to continue rising next year, debt management becomes your number one priority.
It's important to understand the different levels, and costs, of the debt and follow some simple steps.
Pay off the most expensive debt first.
Use savings to pay down your debt.
Talk to your bank if you're in trouble and re-negotiate the term of the loan to reduce payments.
This information was gathered from:
Thinking of buying or selling in Nedlands? Call me anytime.