Speaker 1: Good morning everyone, and welcome back to Sugarmuma's File, a
Speaker 1: podcast that ignites your financial journey with inspiring stories and
Speaker 1: innovative strategies. I am your host, financial planner, Hannah Cannibell,
Speaker 1: and today we are in for another Ask Adam series
Speaker 1: where you get to be brought up to speed on
Speaker 1: your mortgage, what the going rate is, what's financially advantageous
Speaker 1: for you and your goals, and of course what you
Speaker 1: should know and understand and potentially be considering to help
Speaker 1: get the monkey off your back. That is, beat the
Speaker 1: bank at their own game and pay your mortgage off
Speaker 1: as quickly as possible, saving valuable time and money. Now now,
Speaker 1: also a quick reminder, I must do my compliance duties,
Speaker 1: and that is to remind you that everything in this episode,
Speaker 1: including every single other episode, is always general advice only
Speaker 1: and for educational purposes. Also, please know that should you
Speaker 1: want to speak with Adam or work with Adam, I
Speaker 1: get zero benefit both upfront and ongoing. And having Adam
Speaker 1: on this podcast, I am more than happy to share
Speaker 1: Adam as a fantastic resource because I know for myself
Speaker 1: personally after working with Adam for eighteen years how valuable
Speaker 1: his advice is for your financial journey towards independence and
Speaker 1: sustainable authentic financial independence. All right, good morning, Adam. How
Speaker 1: are you this morning? I'm well, Thank you, I'm well.
Speaker 1: I love asking these questions today. Whenever we speak on
Speaker 1: the forum, she's quite often I'm always asking me it like,
Speaker 1: what's going on in you know, the mortgage world, and
Speaker 1: what's you know anything new that I need to know
Speaker 1: and understand? And you always have such insightful information and
Speaker 1: it's always very relevant, and you know, I guess up
Speaker 1: to speed with what's going on. I feel like you're
Speaker 1: like kind of ahead of the game. So I wanted
Speaker 1: to talk about the mortgage industry, interest rates, home loans,
Speaker 1: what people are doing, all the trends that you're seeing,
Speaker 1: the things that we need to be look out for
Speaker 1: and be careful with when it comes to our home loan,
Speaker 1: so that we understand that actually having a mortgage free
Speaker 1: life is actually something that is a realistic goal to
Speaker 1: be working on. So I'm going to hit you up
Speaker 1: with the whole parlor of questions if you don't mind.
Speaker 1: All right, Okay, first of all, home loans A right now? Now?
Speaker 1: What do we need to know right now? About the
Speaker 1: home loan market. You know the rates that we're paying.
Speaker 1: I saw the other day online that people can save
Speaker 1: up to on average zero point four to six but
Speaker 1: stand off the home loan if they actually reach out
Speaker 1: directly to their bank or to a mortgage brokeer. Is
Speaker 1: that true?
Speaker 2: The right? I'm not sure, but yes, you need to
Speaker 2: reach out to your bank, Gilly. You know, interest rate
Speaker 2: markets change all the time, and depending on how long
Speaker 2: you've had your loan for discounting changes. So we're always
Speaker 2: recommending at least once a year, contact your bank and
Speaker 2: try to review the interest rate. We do that every
Speaker 2: year for our clients.
Speaker 1: You do that automatically. You don't even we do. Clients
Speaker 1: are even ask You just go and do it.
Speaker 2: Yes, that's right, so why not? I mean banks take
Speaker 2: advantage otherwise, if you don't ask, you don't get and.
Speaker 1: The squeakiest wheel always gets fixed first.
Speaker 2: Absolutely, so it's always worth while doing either direct with
Speaker 2: your bank or through your mortgage broker. You know, it's
Speaker 2: not hard to look at what competitive what the competitive
Speaker 2: rates are out there, you jump online, it's pretty easy
Speaker 2: to get. All you need is a bit of information
Speaker 2: like that on a phone call. And they know that
Speaker 2: you're serious.
Speaker 1: But also you know, if that figure is correct, zero
Speaker 1: point four six percent is the average saving that someone
Speaker 1: will get contacting their bank or going through a mortgage broker.
Speaker 1: That's a lot of money permit to be saving, and
Speaker 1: that's money that could be going towards the home loan
Speaker 1: and you know, helping pay off the mortgage a lot quicker,
Speaker 1: saving valuable time and money.
Speaker 2: Yeah. Look, if you're looking at Sydney on the average
Speaker 2: of a million do or home loan five hundreds a
Speaker 2: month interest.
Speaker 1: It's funny. You know, people will do all these extreme
Speaker 1: things to save money, which I respect and admire, but
Speaker 1: then quite often the simplest, most effective strategy is right
Speaker 1: under our nose. But we can't be bothered to because we,
Speaker 1: I guess have a bit of a block thinking there's
Speaker 1: going to be so much paperwork. It's going to be
Speaker 1: you know, it's going to force us to do our
Speaker 1: taxes or catch up on our personal accounting, and we.
Speaker 2: Just well, yeah, some people just feel awkward about it
Speaker 2: or yeah, so like not wanting to bargain, you know,
Speaker 2: or haggle for you know, a discount if you're buying
Speaker 2: something in retail, it's the same thing. They're a bit
Speaker 2: nervous or awkward about making that phone call, but you
Speaker 2: shouldn't be.
Speaker 1: Well, I guess that's where people like myself use you
Speaker 1: because you do it for me.
Speaker 2: That's right.
Speaker 1: I've never had to make that front call.
Speaker 2: No, exactly, and you know we do it for you.
Speaker 2: And when when you're doing it ongoing. The longer, the
Speaker 2: longer that your rate is closer to the market leading rates,
Speaker 2: the less need you have to refinance. And that is
Speaker 2: a win because refinancing, you know, there are costs, always
Speaker 2: in costs involved with that, and if it's worth while refinancing, great,
Speaker 2: do it. Encourage it. But you can stay with your
Speaker 2: current bank and get a better rate. Why not?
Speaker 1: Do you have a script for people who don't want
Speaker 1: to go and refinance, don't want to go through a
Speaker 1: mortgage broker, but need to call their bank and they're
Speaker 1: willing to have that awkward, uncomfortable conversation.
Speaker 2: Wouldn't say a script, but you know, to your best bluff,
Speaker 2: I mean, yeah, just as I said, do your research,
Speaker 2: check what the best rates out there are. And then
Speaker 2: so on the phone you can you can talk to
Speaker 2: whoever you're speaking with. I want to ask for the
Speaker 2: retention team so they know you're serious about it, that
Speaker 2: you're looking elsewhere, and if you if they don't come
Speaker 2: to the party, you're at the door.
Speaker 1: I feel like we need to do a role.
Speaker 2: Let's try.
Speaker 1: Okay, all right, So I want you to be a
Speaker 1: mortgage owner and I'm going to be the bank. So
Speaker 1: you're going to call me, Hi, Adam, How can I
Speaker 1: help you today?
Speaker 2: Hi, nasty major bank. I've got a homeline account with
Speaker 2: you that i'd like to discuss my interest rate on.
Speaker 1: All right, how can I help?
Speaker 2: Do you need to identify me?
Speaker 1: Most definitely?
Speaker 2: Look, I've been my interest rate is now six point
Speaker 2: eight percent, and I've just been online and I've seen
Speaker 2: that there's rates of six point one percent out there.
Speaker 2: And my husband and I, well, I don't want to
Speaker 2: say my husband, my wife and I.
Speaker 1: I'm sure your wife would be offended, but it would
Speaker 1: also be perfectly find if it was your husband my wife.
Speaker 2: And I want to take advantage of that. So either
Speaker 2: we'll be looking to read finance unless you can sharpen
Speaker 2: our interest rate in order to keep us. Would you
Speaker 2: be willing to look at that for me?
Speaker 1: And when you say sharpened. Do you expect the bank
Speaker 1: to match that rate or beat that rate.
Speaker 2: Depending on the rate you're quoting. You know they would
Speaker 2: rarely beat it, but the idea, yeah, you want to
Speaker 2: ask them to match it, but either he always asks
Speaker 2: them to beat it. As I said, you know, at
Speaker 2: the end of the day, not so much that you're bluffing,
Speaker 2: but give them an opportunity to think that you're not
Speaker 2: serious about moving, and that you're just doing this out
Speaker 2: of process, and that you will accept a lesser discount
Speaker 2: than what you're aware is available out there. Then they'll
Speaker 2: do that. The bank will take advantage of it. So
Speaker 2: tell them you want them to match or beat it.
Speaker 1: All right, everyone, you heard it from Adam. There is
Speaker 1: your script. We just did a little role play for you,
Speaker 1: so you can now confidently make that call to your
Speaker 1: bank and demand a better deal. All right. Another question
Speaker 1: I want to ask you is about changing jobs. If
Speaker 1: someone is about to buy home, or is about to
Speaker 1: apply for say a debt recycling strategy, or looking to
Speaker 1: refinance existing homeland, they are thinking of changing jobs, are
Speaker 1: about to change jobs, does this throw a spanner in
Speaker 1: the works.
Speaker 2: Yeah, it ken. I mean, if you're you're changing to
Speaker 2: similar equivalent of what you're already doing and your income
Speaker 2: isn't reducing, then it shouldn't post so much of a
Speaker 2: problem unless you've got strong probation clauses within your contract,
Speaker 2: so that that would depend on your lenders appetite for that,
Speaker 2: if they've got any issues with probation. So ideally you'd
Speaker 2: prefer it. I'd prefer it clients weren't changing job because
Speaker 2: it is a risk, but most of the time it
Speaker 2: should be okay. There would only be an issue really
Speaker 2: if you're changing from a trade related job to say,
Speaker 2: you know, inequities or stop broker and on a much
Speaker 2: higher income. You know that's got no track record there,
Speaker 2: so that that's a bit of a red flag and
Speaker 2: bank might might want to wait until you've been there
Speaker 2: for a year.
Speaker 1: Yeah wow.
Speaker 2: So in that.
Speaker 1: Scenario, having that, I guess, transparent upfront communication with the
Speaker 1: mortgage broker if there is a career change happening or
Speaker 1: going to happen, is important.
Speaker 2: Yeah, and to get the timing because as I said,
Speaker 2: if it's and most of the time you'll assume someone's
Speaker 2: moving into the same role that they're doing and maybe
Speaker 2: getting a pay rise, which is all normal and great.
Speaker 2: It's more if it's one of those unique situations we're
Speaker 2: chaining into a different job together, or or if it's
Speaker 2: going from full time, permanent full time to a contract role.
Speaker 1: Is the same situational issue with women who are planning
Speaker 1: on having a family and taking time at the workforce question?
Speaker 2: Not. Most banks have a credit policy for that. We're
Speaker 2: in that if you can provide a letter from your
Speaker 2: employer to confirm that you were returning to work and
Speaker 2: what capacity, so how many days a week, you know,
Speaker 2: what percentage of your full time income you're going back to.
Speaker 2: They'll factor that into the credit assessment and what you
Speaker 2: can afford to borrow. And then you just need to
Speaker 2: ensure that you've got enough cash in the bank to
Speaker 2: cover any gap of income between when you go on
Speaker 2: matturnity leave to when you return to work. And that's
Speaker 2: all okay.
Speaker 1: That is so interesting to know, and so many people
Speaker 1: wouldn't even think about that, you know. That's why that
Speaker 1: preparation for you start having a family is so important.
Speaker 1: On that note, is there a maximum age that someone
Speaker 1: can apply buy a home as a principal place of residence?
Speaker 2: No, there's no maximum age. I mean, you need to
Speaker 2: be ideally and still working. If you're not still working,
Speaker 2: then you need to have.
Speaker 1: Sufficient be a self funded retire to evidence.
Speaker 2: So the bank can afford whatever loan you're taking out.
Speaker 2: But no, there's no age maximum age.
Speaker 1: The next question I want to ask you is how
Speaker 1: do you get out of a low dock loan?
Speaker 2: Don't get one to begin with.
Speaker 1: But there are situations where people are time poor, they've
Speaker 1: got a complicated situation, they're self employed, their money's tied up,
Speaker 1: you know, in assets that can't be liquidated as quickly
Speaker 1: as they planned. You know, it's situational and they've had
Speaker 1: to take that out, and now the situation has calmed
Speaker 1: itself down. How do they unwind that and get back
Speaker 1: to a competitive interest rate? And you go back to that.
Speaker 2: It can be things like starting a new business and
Speaker 2: you know you've only been trading for just over twelve
Speaker 2: months and you haven't got your financials in audio. And
Speaker 2: that's common. So oh, look, it's the same as any
Speaker 2: other refinances. Gathering income documentation, tax returns to see if
Speaker 2: you can then move out of that lowdock line. Ideally
Speaker 2: you want to be if you are in a low
Speaker 2: dock loan. Hopefully you're not on that's got high exit costs.
Speaker 2: High exit costs aren't as common these days when you
Speaker 2: know the furdest establishment fees were banned. Oh god, probably
Speaker 2: teen years ago, now ten years ago. So yeah, look,
Speaker 2: it's just about keeping an eye on it, reviewing your
Speaker 2: finances and the viability of refinancing out to a standardlone,
Speaker 2: which is why you would work with a broker. Yeah.
Speaker 1: Interesting, and so you can actually get out of it.
Speaker 1: Not the end of the world if you are with
Speaker 1: a load doc loan. And obviously for listeners that don't
Speaker 1: know what a load dock loan is, it's a loan
Speaker 1: that you tend to get a brout with less questions
Speaker 1: and therefore pay a higher interest rate and sometimes substantially high.
Speaker 2: Yeah, you're basically not verifying your income through documentation, so
Speaker 2: you need to be self employed, have a registered ABN,
Speaker 2: be registered for GST some instances. Instances you need to
Speaker 2: have been trading for at least two years to qualify
Speaker 2: for load docks. We don't do a lot of load
Speaker 2: dock loans, so it's like a last result it is.
Speaker 2: But again, and it's similar to what I've said in
Speaker 2: the past about lender's mortgage insurance a load doc loan.
Speaker 2: It's an opportunity costeh. If you need it, you need it,
Speaker 2: and that's why it's good. And there's so many different
Speaker 2: a range of different borrowing options out there because there
Speaker 2: are so many different, you know, personal situations that need it.
Speaker 1: Now, one piece of advice you've always given me and
Speaker 1: I've always followed, and this goes back I think we're
Speaker 1: not mid twenties working together, and that is to always
Speaker 1: check your credit rating. And you always said to me
Speaker 1: check it, not because of what my credit rating might be,
Speaker 1: but more about identity theft. Can you explain to everyone
Speaker 1: why you need to know your credit rating and why
Speaker 1: you need to check it on a regular basis.
Speaker 2: Ye, credit rating is one of the first things that
Speaker 2: is checked when you apply for finance these days. So
Speaker 2: it's all online. All of your accounts are linked up
Speaker 2: to your credit file and are showing your repayment history
Speaker 2: each month, credit cards, personal loans, home loans, they're all
Speaker 2: on there. So as if your credit rating is dropping,
Speaker 2: it means you've got some bad repayment history, and as
Speaker 2: you said, identity theft, so it could be for a
Speaker 2: credit card that's on your credit file now that you're
Speaker 2: not even aware of if there's been some identity theft.
Speaker 2: So there's a way that you can actually register for
Speaker 2: credit file up So you've got to Equifax, who you
Speaker 2: can sign up for to get month it's a month
Speaker 2: that your quarterly updates or any alerts on your credit file.
Speaker 2: So if there's something to be concerned about, you can
Speaker 2: get Quifax credit alerts.
Speaker 1: Okay, that's good to know, and that's something I recommend
Speaker 1: everyone take ten minutes out other day to go and do.
Speaker 1: And it's actually quite interesting what you might discover and
Speaker 1: also kind of gamifies your financial health because you can
Speaker 1: look at your score and then come back to it
Speaker 1: in six months time or a year's time and see
Speaker 1: what's improved. You know, is it higher And obviously they
Speaker 1: all vary in how they sort of grade you, but
Speaker 1: it definitely adds a little bit of like healthy competition.
Speaker 2: Yeah, it does, because as I said, when line applications
Speaker 2: are processed now, it's all done online. So as soon
Speaker 2: as the application goes in, get a credit file check,
Speaker 2: so the bank straight away grab that your credit file,
Speaker 2: your credit score, and if you've got a bad score,
Speaker 2: you can get client instantly. They won't even bother looking
Speaker 2: at your application. It's just auto to clim So if
Speaker 2: you're getting ordered a coin, that's bad.
Speaker 1: So you then have I guess the benefit of hindsight
Speaker 1: in checking your credit rating to then improve it before
Speaker 1: you then go and apply.
Speaker 2: Correct because your credit for your credit score is if
Speaker 2: you've got some negative repayment history on any of your
Speaker 2: financial accounts, it'll take it can take up to two
Speaker 2: for that to then clear off your file get your
Speaker 2: score back up, So it's on there for two years
Speaker 2: and that's just bad repayment history. But obviously if you've
Speaker 2: got a default or a judgment, you know they're on
Speaker 2: there for seven years.
Speaker 1: All right, paperwork? I know I always ask this, but
Speaker 1: just to let the listeners know, especially if there's any
Speaker 1: new listeners. What do you need to have from a
Speaker 1: paperwork point of view to apply for a homeland? What
Speaker 1: are you going to tell me if I call you
Speaker 1: and say, adam money to make an appointment, I need
Speaker 1: to refinance or I need to I want to buy
Speaker 1: it home. What's the list of things you're going to ask?
Speaker 2: So let's just do basic. You know, a pair O
Speaker 2: ygen employee. First thing, the most important is one hundred
Speaker 2: points ID ideally a passport and a license, both the
Speaker 2: current last two or three pay slips, bank statements, six
Speaker 2: months worth of bank statements showing your your monthly spending,
Speaker 2: so your monthly habits. That's just a very basic level
Speaker 2: if you're looking to buy it, but if you're looking
Speaker 2: to refinance, then it'd also need months of your homeland
Speaker 2: repayments credit card statements.
Speaker 1: So really not actually that my heart.
Speaker 2: No, it's not at all. It's it only gets deeper
Speaker 2: and more complex if you're you know, in a unique
Speaker 2: employment situation, maybe getting commissions or bonuses or over time,
Speaker 2: in which case then we can look for additional documents
Speaker 2: like you know, your income and your income statements, which
Speaker 2: we used to call group stifficates that the employer would issue.
Speaker 2: That's now linked through your mind go ounce. You can
Speaker 2: download your income statement from there.
Speaker 1: So it's actually pretty easy.
Speaker 2: It is, and there's so much There are so many
Speaker 2: user tools that we've got now to assist with that,
Speaker 2: like data scraping for bank statements, so you basically there's
Speaker 2: a few different providers. They're safe and secure. So just
Speaker 2: to give you a quick idea. Basically, we give our
Speaker 2: clients a link, they jump into the link, log into
Speaker 2: their select with their bank is log in. They're not
Speaker 2: giving their log in details to anyone. They select the
Speaker 2: accounts that they want statements to be sent for, and
Speaker 2: then the system data scrapes those statements and emails those.
Speaker 1: Back to our So it literally takes ten minutes.
Speaker 2: Two.
Speaker 1: Yeah, actually I did this, so I know it does
Speaker 1: take it literally too. All right, you touched on saving statements.
Speaker 1: Do the bank really need to see some savings? And
Speaker 1: obviously they do need to see your your budget or
Speaker 1: your living expenses, but what about situations where you've inherited
Speaker 1: money and that's sort of deposit or you know, you've
Speaker 1: got parents grandparents that have given you some money to
Speaker 1: help pay for your first time Like, where does that
Speaker 1: kind of fit in in the complexities of being able
Speaker 1: to show that you can afford borrow that money you
Speaker 1: can she afford to pay it back.
Speaker 2: Yeah, good question. And you've put a couple of scenarios
Speaker 2: in there that are relevant at the moment because you know,
Speaker 2: we see it, we see it regularly, so first home
Speaker 2: buyers generally need to show genuine savings. When I say
Speaker 2: genuine savings got at least five percent deposit in your
Speaker 2: account for at least six months. However, there are some
Speaker 2: really good borrowing options linked to that now, well, not
Speaker 2: particularly specifically if you're a renter. So if you and
Speaker 2: your partner are renting and you've got her lease through
Speaker 2: a licensed real estate agent, you can verify you then
Speaker 2: paying rent for six months that can be used cover
Speaker 2: the genuine saving argument.
Speaker 1: That's really good to know. They would take a lot
Speaker 1: of stress and pressure of people show.
Speaker 2: Yeah, definitely, because you're right some you know, particularly with
Speaker 2: cost of living at the moment, it's hard for a
Speaker 2: lot of people to say. But if they're given from
Speaker 2: parents or inheritance that they can use as a bonus, yeah, bus,
Speaker 2: you know, then it means there are options to get
Speaker 2: around that genuine savings policy. And it's not available widely
Speaker 2: available everywhere. There's you know, select lenders that oper that
Speaker 2: type of thing, but it's available, that's the.
Speaker 1: Main thing, and that's something you help people out with absolutely.
Speaker 1: I imagine you've come across it on a regular basis
Speaker 1: as well.
Speaker 2: Yeah, most people that are looking to buy have some
Speaker 2: form of savings. You know, it's pretty rare that you
Speaker 2: see someone that doesn't have any savings and they've got
Speaker 2: some want to go and then take out a mortgage
Speaker 2: because it's scary, right if you haven't been able to
Speaker 2: save and you know, how are you're going to afford
Speaker 2: the mortgage. So it's it's rare. But at the same time,
Speaker 2: you know, that's not to say that it doesn't become
Speaker 2: available and someone's been paying a high amount of rent
Speaker 2: over that period that is the equivalent of a mortgage
Speaker 2: as well. So that's where that policy comes into right.
Speaker 1: Previously in other episodes, we've talked about those you know,
Speaker 1: kind of magical formulas that you see maybe people who
Speaker 1: aren't necessarily experience or qualified, saying, you know.
Speaker 2: The ones that don't exist.
Speaker 1: Yeah, well the ones that you know, like, use this
Speaker 1: formula to work out how much you can borrow and
Speaker 1: this is how much the bank will lend you. And
Speaker 1: obviously they are not factually correct. You could loosely say
Speaker 1: use it as a guide, but you know they're actually
Speaker 1: a little bit misleading. What calculators do you recommend people use,
Speaker 1: you know, the stereic clear of the fancy magical formulas,
Speaker 1: which are basically a load of crap. But there are
Speaker 1: calculators online that you can use, you know, on the
Speaker 1: various bank's websites. Which ones do you recommend people use
Speaker 1: if they're thinking.
Speaker 2: About On our website, we've got must be twenty or
Speaker 2: thirty different calculators, so you'll find them all on there.
Speaker 2: You know, how much can I afford, what's my borrowing capacity?
Speaker 2: Things like that. It's good just to play around with,
Speaker 2: but really be serious about buying, go and see a broker. Yeah,
Speaker 2: because all it takes is if you get emotional about
Speaker 2: seeing a property online and you want it, and then
Speaker 2: the real estate agent talks to you and says, I
Speaker 2: don't worry, you can put an offer in and we'll
Speaker 2: give you five days to get your finance ready. You know,
Speaker 2: you should be ahead of all that get a pre
Speaker 2: approval in place. So if you're just being inquisitive about
Speaker 2: what you know you can borrow out of curiosity, sure,
Speaker 2: have a look at the capadors online. But if you're
Speaker 2: really thinking about buying, go and see someone to get
Speaker 2: pre approval in place, because all it takes is to
Speaker 2: get a bit unlucky with some bad timing. Let's say
Speaker 2: you are eligible for a home loan and you qualify
Speaker 2: for a loan that would secure the property of your
Speaker 2: dreams that you're looking at, but you didn't act early
Speaker 2: enough and then you miss out on it because you
Speaker 2: didn't act. So it's not hard and you know you're
Speaker 2: not paying a mortgage broker is not charging you, so
Speaker 2: what's stopping you get pre approval.
Speaker 1: And you should be rocking up to if you're doing
Speaker 1: property inspections, you should have all of those ducks lined
Speaker 1: up so that when you see it up with you
Speaker 1: and you can quickly jump on it because these things
Speaker 1: are time sensitive, especially in a competitive market like this.
Speaker 2: Absolutely, and as a broker who cares, I can tell
Speaker 2: you as well, it's really you know, it's really disappointing
Speaker 2: as a broker if we let a customer down by
Speaker 2: not getting the approval through. The approval through in time.
Speaker 1: So but at the same time, they have to allow
Speaker 1: you the opportunity to get it done in times, rocking
Speaker 1: out the day before.
Speaker 2: But even if they come late, it's still you still
Speaker 2: feel like you haven't been able to deliver, So it's disappointing.
Speaker 2: So yeah, that's why I encourage everyone get in get
Speaker 2: the approval through. There's no fee doing it, So why not?
Speaker 1: Now is there a bank that most people prefer? Like
Speaker 1: do you find people go I hate that bank or
Speaker 1: can we please go with that bank? And the record
Speaker 1: is remind everyone this is not product advice whatsoever. But
Speaker 1: I'm intrigued because there's so much bank bashing going on,
Speaker 1: and I know from financial planning. When I'd say I
Speaker 1: think we should invest in this bank, stop, I'd get
Speaker 1: this like five minute story about how the bank teller
Speaker 1: at this particular bank was route to them and they
Speaker 1: will never invest in that bank ever again, Like is
Speaker 1: that same with mortgages?
Speaker 2: Yeah? Look, there's it all stems to know, experiences, having
Speaker 2: bad experiences for being turned away from the bank and
Speaker 2: then good experiences for being attracted to certain banks. So
Speaker 2: you've got you know, customer satisfaction surveys, you know, who
Speaker 2: are getting which banks are being a highest up that
Speaker 2: list year after year. You know, I see Bend to
Speaker 2: Go and Adelaide Bank are up there quite a bit
Speaker 2: with that. Who I think are a good bank? Macquarie Bank.
Speaker 2: I really like Uncurt You know, it's more the major
Speaker 2: banks that I think customers are turning off because they're
Speaker 2: closing branches refusing to provide offer existing customers better rates.
Speaker 2: I don't want to go into that.
Speaker 1: We're not bank bashing here, That's okay. I'm just intrigued.
Speaker 2: That was my question, and the chops and changes too,
Speaker 2: because you know, banks and non majors or second tier lenders,
Speaker 2: they all go through different periods of seeking market share,
Speaker 2: and whether that be the reporting the shareholders or just
Speaker 2: timing of wanting to take on more market share, they
Speaker 2: come out with more aggressive offers, better rates, better offers,
Speaker 2: discounted fees and things like that, and with that they
Speaker 2: become popular.
Speaker 1: All right. The next question I have for you is
Speaker 1: I know the answer to this, and I was horrified
Speaker 1: when I saw this question, but as I promise people
Speaker 1: who DM me the questions on Instagram for you, I
Speaker 1: have to pass them on to you. And this question
Speaker 1: is can a home loan be paid with a credit
Speaker 1: card in order to maximize my credit card points?
Speaker 2: Finally, no, unfortunately not And look at it probably gets
Speaker 2: to the point where it did you know you'd have
Speaker 2: your fees associated with doing it that would make it
Speaker 2: not worth while you're basically purchasing points.
Speaker 1: All right. Next question is can you include stamp duty?
Speaker 1: In your mortgage application.
Speaker 2: I'm a bit confused by that because you have to
Speaker 2: include stamp duty if you're buying. So yeah, it's all
Speaker 2: we're when we're assisting clients with a purchase, all the
Speaker 2: fees and charges are inclusive in our proposal. The last
Speaker 2: thing we want to do is miss or overlook.
Speaker 1: Stamped You to forget about stamp That would be nice
Speaker 1: to forget about stamp duty, but it is a very
Speaker 1: expensive entry to property, all right. The other question I
Speaker 1: received was when it comes to recommend it recommending consolidating
Speaker 1: bad debt, you know, such as outstanding credit cards that
Speaker 1: just don't seem to be ever you can never get
Speaker 1: on top of, or you know, buy now, pay later
Speaker 1: that's caught you by surprise, or even like personal ozed
Speaker 1: car loans that have you just not quite gone to plan.
Speaker 1: How do you make sure that you if you're going
Speaker 1: to consolidate them, how do you make sure that you
Speaker 1: don't I guess, repeat history, or you make sure that
Speaker 1: you actually get back on top of your finances again.
Speaker 2: Look, the I would say, you know, just thinking about
Speaker 2: the you know, deciding when the time is to consolidate them. Say,
Speaker 2: for example, you've got a credit card and all you're
Speaker 2: doing is making the minimum payment each month on that
Speaker 2: and not making inroads to reducing it faster. That would
Speaker 2: indicate to me that it's going to take you ten
Speaker 2: years to pay off that credit card. So twenty two
Speaker 2: percent interests that's not good. No, So that'd be the
Speaker 2: time if you're not making anything more than the minimum payments.
Speaker 2: If you're looking to do it, ideally, you'd want to
Speaker 2: do it in a separate loan split to your home loan.
Speaker 2: Consoliding those into the one home loan is okay if
Speaker 2: you start making inroads, but it's good well more, particularly
Speaker 2: if we're talking about a car loan it's sold the carline.
Speaker 2: You don't want to be paying a car loan off
Speaker 2: over thirty years gosh. So separating the two I like
Speaker 2: to recommend so that you can aggressively try and pay
Speaker 2: the car loan or the consolidation loan off faster.
Speaker 1: It also makes you more honest because consolidating into the
Speaker 1: homelan will and I'm purely thinking about the psychology of money here. Yeah,
Speaker 1: it kind of like sweeps it under the map, the Yeah,
Speaker 1: whereas you can see that loan sitting there separately, and
Speaker 1: it's almost like, you know, a bit of a flick
Speaker 1: where you're like, Okay, that's the raw reality of my
Speaker 1: silly purchase of a car that's appreciating asset that I
Speaker 1: borrow it and should have done. I'll take ownership of that,
Speaker 1: learn and grow and be wiser. So I must pay
Speaker 1: that off as quickly as possible as a priority.
Speaker 2: Definitely great points. Yeah, being responsible and there decisions you made,
Speaker 2: so yeah, if you're hiding it into your mortgage, you're right,
Speaker 2: it's the truth. Hurt.
Speaker 1: But this is where we learn the most about money,
Speaker 1: and you know we're open to it. Become wiser and smarter.
Speaker 1: All right. The next, second, last question, This was a
Speaker 1: brilliant question and it was from someone who has ADHD
Speaker 1: like myself, and I thought the discussion was brilliant. Why
Speaker 1: hadn't thought of this asking this myself to help reduce temptation? Well,
Speaker 1: remove temptation? Can you reduce your limits slash available funds
Speaker 1: so that you don't get tempted to spend it? This
Speaker 1: would be a strategy for people with ADHD in managing
Speaker 1: their mortgage.
Speaker 2: Yes you can. It's just a fine call to your bank. Basically,
Speaker 2: requesting them to reduce the limit. And you know, that's
Speaker 2: if you don't want to do debt recycling, because if
Speaker 2: you've built up that redraw in your line by paying
Speaker 2: additional lump times off, that's great. If you don't want
Speaker 2: to debt recycle, call the bank up, get them to
Speaker 2: reduce the limit. Downside to that is that if you
Speaker 2: then had an emergency and needed the money, you can't
Speaker 2: get it.
Speaker 1: Back, you would reapply that to reapply, that's right.
Speaker 2: But if you're doing it to reduce temptation stop that spending,
Speaker 2: then yeah, that's certainly an option. You can just call
Speaker 2: and cancel it.
Speaker 1: Yeah, and you don't have to reduce all that remove
Speaker 1: all of that money. You might have to say seventy
Speaker 1: thousand dollars in your redraw facility or offset account. You
Speaker 1: might reduce it by fifty thousand, so you still have
Speaker 1: twenty there. Correct then, but it is definitely I would
Speaker 1: imagine a great way of just removing that temptation or
Speaker 1: reducing that temptation to go and blow it. And you know,
Speaker 1: but obviously got to make sure you still have your
Speaker 1: emergency money set aside.
Speaker 2: One d per and that's when you see people paying
Speaker 2: off their line really quickly, getting rid of redraw without
Speaker 2: spending it or using it, because you generally find find.
Speaker 1: A way well, there's always something to go.
Speaker 2: Percent of the market would find a way to spend.
Speaker 1: It, exactly. And look, I have myself personally before I
Speaker 1: met Tom and before we combine our flandswer is that
Speaker 1: something I definitely did was every six months I would
Speaker 1: call the bank and say, can you just reduce it?
Speaker 1: And I was only ever asking like small amounts like
Speaker 1: ten fifteen thousand dollars at a time. And I remember
Speaker 1: the consult saying you're sure about this, and I was like, yes,
Speaker 1: please reduce it.
Speaker 2: On a handbag, sorry, because you had your on a handbag.
Speaker 1: Yes, that is true, but you know, sometimes a handbag
Speaker 1: is very much in a necessity and I will admit
Speaker 1: some of my handbag's actually gone up in value. Now.
Speaker 1: The final question is is what are your thoughts on
Speaker 1: credit cards with home loans where you put everything on
Speaker 1: a credit card and then pay it off the end
Speaker 1: of the month. Does it really work in reality or
Speaker 1: do people spend way more and not really get ahead,
Speaker 1: Which is actually the perfect question coming off the back
Speaker 1: of our last one.
Speaker 2: Yeah, and these are the conversations I like to have
Speaker 2: as well. It does work, but it doesn't work, and
Speaker 2: we out no, well, it works if you're a good budget.
Speaker 2: If you don't budget and you spend more than it
Speaker 2: doesn't work because if you use it properly, you earn
Speaker 2: points on your card, you save interest on your homeland
Speaker 2: because your wages are sitting in your officet account or
Speaker 2: your redrawal. But I'd always recommend getting a credit card
Speaker 2: limit that is equal to your monthly living expenses budget,
Speaker 2: so that basically that's the thing that stops you from
Speaker 2: going over. But you know, it's not as encouraged. I
Speaker 2: don't encourage it as much as I used to because
Speaker 2: of the in reality it's not being used to its
Speaker 2: full effect. So you don't trust yourself with a credit
Speaker 2: card and you're one of those people that can't pay
Speaker 2: it off in full every month.
Speaker 1: Probably not for you, I have to say, as a
Speaker 1: financial planner, not once have I ever seen this strategy work.
Speaker 1: Everyone spends more and they have this kind of laser
Speaker 1: fair squandalous mindset where they're like, it's fine to put
Speaker 1: on the credit card, and each month the credit card
Speaker 1: bill is getting bigger and bigger because they have this
Speaker 1: like so wid it's fine, just put it on the
Speaker 1: credit card mentality, and quickly things spiral out of control.
Speaker 1: And it's not until you know things going wrong where
Speaker 1: credit cards being hit with interest charges and eight fees
Speaker 1: and you know there's not enough to eat the mortgage repayment,
Speaker 1: and you know they put their hands up panicking, We've
Speaker 1: got to just strip everything, go back and essentially go
Speaker 1: back to simplicity. So and yes, they've got a whole points,
Speaker 1: but they can't afford to go on the holiday and
Speaker 1: use those points because they've you know, this got them
Speaker 1: into a really sticky situation. But I mean that is
Speaker 1: my personal experience, and I don't say that in a
Speaker 1: negative way, but I say it just I guess a
Speaker 1: word of warning to listeners, like be careful of this.
Speaker 1: I don't. I think that's a very clever product created
Speaker 1: by the bank and you know, very smart, clever people
Speaker 1: and marketing teams sitting around a boardroom.
Speaker 2: But and then they send out automatic limiting crease.
Speaker 1: Yeah, it just it just I've seen it backfire, and
Speaker 1: I'm probably aggressively passionate about why I don't think it works.
Speaker 1: And I like simplicity, but yeah, it's on paper it
Speaker 1: does work.
Speaker 2: Yeah, and look I see a lot more than you obviously,
Speaker 2: so I do see a lot that work. But yeah,
Speaker 2: it's not it's not something that you can hang your
Speaker 2: hat on that's going to get you well well ahead
Speaker 2: on your mortgage. So it's only small, small bit tier
Speaker 2: in there. But so if you're not very good with
Speaker 2: credit cards and budgeting, don't do it.
Speaker 1: All right, Adam, As always, thank you so much for
Speaker 1: coming in this morning. It's always I love these conversations
Speaker 1: with you, as I do never I hope you up
Speaker 1: the phone and cally, which is all the time. But
Speaker 1: these are such valuable bits of information and you know,
Speaker 1: nuggets of golden words of wisdom to impart with all
Speaker 1: the listeners about how to use their mortgage wisely, how
Speaker 1: to actually use their mortgage to get ahead financially, how
Speaker 1: to achieve their goals and dreams, but also how to
Speaker 1: achieve them in a sensible, wise proactive way that really
Speaker 1: does help make a big difference. So thank you so
Speaker 1: much for taking your time out of the day to
Speaker 1: come in and you know, answer everyone's questions as part
Speaker 1: of our ask Adams.
Speaker 2: Thanks for having me Kenna.
Speaker 1: I love it, and as always, if anyone wants to
Speaker 1: speak to Adam, please feel free to reach out directly
Speaker 1: to him his email and mobile phone number. I'll pop
Speaker 1: in the podcast notes. So, and did it remind you
Speaker 1: I have absolutely nothing, no benefit at all? Actually I will.
Speaker 1: I will admit Adam shoutowed me a free coffee this morning.
Speaker 1: That will be the one benefit that I get from
Speaker 1: this episode and all my others. But please have a
Speaker 1: complete upfront transparency around that. And again to remind everyone
Speaker 1: that everything we talk about is for educational purposes only
Speaker 1: and general advice. Now, everyone, thank you so much for
Speaker 1: listening to this morning's episode on Sugar Mama's Fireplay. If
Speaker 1: you can take a moment to leave me a rating
Speaker 1: and a review, I would greatly appreciate it. And in
Speaker 1: the meantime, please stay motivated, empowered, and never stop seeking
Speaker 1: new ways to achieve your financial goals and dreams, no
Speaker 1: matter how big or how small they may be. I
Speaker 1: believe in you, and this is Sugar Mama's Fireplay