WEBVTT - Ask Adam: What is a GREAT interest rate & how to get it 0:00:00.320 --> 0:00:04.000 Good morning everyone, and welcome back to Sugar Mama's Fireplay, 0:00:04.360 --> 0:00:08.440 the podcast that ignites your financial journey with inspiring stories 0:00:08.520 --> 0:00:11.760 and innovative strategies that are going to help you achieve 0:00:12.000 --> 0:00:14.960 all of your financial goals and dreams as efficiently and 0:00:15.040 --> 0:00:19.000 as effectively as possible. I am your host's financial planner, 0:00:19.079 --> 0:00:21.520 Canna Campbell, and today we are back with our mini 0:00:21.560 --> 0:00:26.240 series Ask Adam, where we get to pick Adam's brain 0:00:26.880 --> 0:00:29.280 and get a really deep insight as to what is 0:00:29.320 --> 0:00:32.000 going on with the mortgage market, what interest rates we 0:00:32.080 --> 0:00:34.600 should be paying, what's a great deal, what do we 0:00:34.680 --> 0:00:38.000 need to be careful of or traps to avoid, and 0:00:38.120 --> 0:00:42.640 really get some honest, transparent feedback that is only going 0:00:42.680 --> 0:00:47.960 to help us with our financial journey towards independence and freedom. Now, 0:00:48.040 --> 0:00:50.519 before I begin, a quick reminder, this is general advice 0:00:50.560 --> 0:00:54.120 only and educationally based, so please do not interpret this 0:00:54.160 --> 0:00:58.440 as being personal, strategic or investment advice at any time. 0:00:58.840 --> 0:01:00.400 And of course, if you want to reach out to 0:01:00.440 --> 0:01:03.000 Adam directly to ask him questions about your mortgage and 0:01:03.040 --> 0:01:05.640 what you should be doing, please feel free to and 0:01:05.760 --> 0:01:09.520 know that I get zero referral commissions or fees for 0:01:09.640 --> 0:01:11.880 doing this I just simply have Adam on the show 0:01:11.920 --> 0:01:14.480 because I know him, I trust him, and I have 0:01:14.640 --> 0:01:19.160 over eighteen years experience working with Adam and he actually 0:01:19.160 --> 0:01:22.840 does my own mortgage and investment loans, so I know 0:01:22.920 --> 0:01:25.399 how good he is. Let's get cracking with. 0:01:25.600 --> 0:01:39.479 Our ask Adam serious, Adam, thank you so much. 0:01:39.319 --> 0:01:41.000 For coming in this morning. 0:01:41.600 --> 0:01:43.200 How are you are? 0:01:43.640 --> 0:01:46.480 I will thank you and well, I am. I'm actually 0:01:46.520 --> 0:01:49.680 quite excited because you are doing refinancing our loans at 0:01:49.680 --> 0:01:50.560 the moment for Tom and I. 0:01:50.640 --> 0:01:53.280 You know, yeah, fun times. 0:01:52.880 --> 0:01:56.400 Fun times, and it's is a refreshing insight to see 0:01:56.400 --> 0:01:58.320 with the process that you have to go through and 0:01:58.800 --> 0:02:03.200 the paperwork, and it's actually a lot easier than you 0:02:03.240 --> 0:02:04.320 sort of build up in your mind. 0:02:04.880 --> 0:02:07.600 It is now be so much easier. There's a lot 0:02:07.600 --> 0:02:10.720 more automation and technology that we're using that make it 0:02:10.760 --> 0:02:13.519 a really seamless process and we try and take away 0:02:13.520 --> 0:02:15.680 all the heavy lifting for all our clients and it does. 0:02:16.840 --> 0:02:18.480 It is a lot more enjoyable now than what it 0:02:18.560 --> 0:02:18.960 used to be. 0:02:19.680 --> 0:02:22.600 I know, from you know, financial planning, you know, getting 0:02:22.600 --> 0:02:27.040 clients to complete forms, particularly insurance application forms, which are lengthy. 0:02:27.160 --> 0:02:29.400 You know, it can be a question block yeah, I'm 0:02:29.520 --> 0:02:32.720 very confronting questions. Can you just quitt quickly out of interest? 0:02:32.720 --> 0:02:34.720 And this is not, I guess a question that's on 0:02:34.720 --> 0:02:36.320 my list for this morning, but it's one I would 0:02:36.320 --> 0:02:38.240 love to touch you ask you. Can you explain to 0:02:38.240 --> 0:02:41.240 everyone what the process is to do that paperwork because 0:02:41.280 --> 0:02:44.000 it is actually a lot easier than people really it is. 0:02:44.160 --> 0:02:46.960 It is look first, first, up coming on board with 0:02:47.000 --> 0:02:50.160 me as a client is a portal. We've got access 0:02:50.160 --> 0:02:52.880 to a portal ful filling in all your personal information. 0:02:53.000 --> 0:02:56.200 Personal information is off top of your head, right, it's 0:02:56.240 --> 0:03:00.640 all your personal details, where you're living, where you're working, 0:03:01.040 --> 0:03:03.280 your assets, and my abilities. It should be there off 0:03:03.280 --> 0:03:04.720 the top of your head, unless you've got a complex 0:03:04.760 --> 0:03:08.160 situation where you might need to refer to some filing 0:03:08.200 --> 0:03:11.520 that you've got. But it's about a twenty minute process 0:03:11.680 --> 0:03:14.720 through that portal. It's safe and secure and once that's 0:03:14.960 --> 0:03:17.520 once you've done that with me, it's generally once off 0:03:17.960 --> 0:03:20.400 after that. Any other finance we're doing down the track 0:03:20.520 --> 0:03:22.560 is very quick and easy, and we try and make 0:03:22.560 --> 0:03:24.360 that as simple as possible, so you don't really need 0:03:24.400 --> 0:03:26.160 to go through and fill out a form again. We 0:03:26.360 --> 0:03:29.840 just capture what changes there have been, but upfront, it's 0:03:29.840 --> 0:03:31.800 about twenty minutes to fill the format, attach all of 0:03:31.800 --> 0:03:34.640 your documents, press a button, I'm done, and off you go. 0:03:35.240 --> 0:03:37.760 That is a lot easier than when I think back, 0:03:37.840 --> 0:03:40.320 say ten years ago, when you were I was actually 0:03:40.320 --> 0:03:42.840 getting divorced and I was a single mother, and the 0:03:42.840 --> 0:03:46.240 amount of paperwork and even like letters from accountants and 0:03:46.360 --> 0:03:50.120 statements and yeah, oh from time to. 0:03:50.080 --> 0:03:52.960 Time we need the odd letter from an accountant or 0:03:53.040 --> 0:03:54.960 you know, to support tax re frends and things will 0:03:54.960 --> 0:03:58.560 explain something. But again, we can communicate with your accountants 0:03:58.560 --> 0:04:00.560 for you all of those things, try and do to 0:04:00.560 --> 0:04:03.680 make it easier. So whatever you're open to, really, but 0:04:04.360 --> 0:04:06.040 there are easy ways to do things now. 0:04:06.200 --> 0:04:09.840 So it's a lot more seamless, definitely. All right, Okay, 0:04:09.840 --> 0:04:13.040 so let's get cracking with these with these questions. All right, 0:04:13.280 --> 0:04:14.720 what do we need to know right now about the 0:04:14.760 --> 0:04:15.480 mortgage market. 0:04:17.000 --> 0:04:19.159 That's a tough one, really, Like I'm having so many 0:04:19.160 --> 0:04:25.400 conversations at the moment with potential customers who you know, asking, 0:04:25.920 --> 0:04:27.479 you know, they're not really happy with their rate and 0:04:27.480 --> 0:04:29.200 can they move, and a few of them I'm having 0:04:29.200 --> 0:04:31.000 to say, look, yourate's actually not that bad. 0:04:31.800 --> 0:04:34.520 That's why you're honest, like giving them good advice. 0:04:34.640 --> 0:04:36.760 Yeah, well, look, I don't have any interest in wasting 0:04:36.800 --> 0:04:40.240 people's valuable time on my own if it's not worthwhile, 0:04:40.480 --> 0:04:43.320 and I can't you can't sugarcoat it, and you can't 0:04:43.320 --> 0:04:45.679 gooss over it. If we've got to present the facts 0:04:45.680 --> 0:04:48.240 and the details, we're trying to recommend something to a 0:04:48.240 --> 0:04:51.120 potential client. So it doesn't make sense why do it 0:04:51.160 --> 0:04:53.320 and why I waste each other's time. But the main, 0:04:53.480 --> 0:04:54.960 the main thing to take away from that is that 0:04:55.400 --> 0:04:56.880 you just need to be a bit more patient. I 0:04:56.880 --> 0:04:59.719 think some competitive rates will come back later in the year, 0:05:00.480 --> 0:05:03.040 and when that comes it'll be more valuable or more 0:05:04.080 --> 0:05:06.240 beneficial to change at that time. Then now for the 0:05:06.279 --> 0:05:09.040 sake of a few basis points and a few hundred 0:05:09.080 --> 0:05:11.360 dollars a year, wait wait until it's more beneficial. 0:05:11.960 --> 0:05:14.320 It's definitely worth asking the question. But if you know, 0:05:14.320 --> 0:05:16.279 you get an answer and as you said, you're actually 0:05:16.360 --> 0:05:19.640 a great rate. You can't do anything better than that. 0:05:19.720 --> 0:05:21.280 It's actually great to know that. 0:05:21.440 --> 0:05:24.960 Yeah, it's really sure, and at least you know that. 0:05:25.960 --> 0:05:28.720 You know the biggest issue is that rates are high. 0:05:29.000 --> 0:05:30.560 You know, if you're seeing a six in front of it, 0:05:30.600 --> 0:05:32.840 you just think it's crazy because we came from two's 0:05:33.600 --> 0:05:36.279 and low threes. So it's just about getting over that 0:05:36.279 --> 0:05:37.120 that mindset. 0:05:37.360 --> 0:05:39.800 We have short term memories, Yeah, definitely, because if you 0:05:39.880 --> 0:05:43.479 go back, you know, seven, eight, nine years like different 0:05:43.600 --> 0:05:46.120 rates or even further, actually. 0:05:45.800 --> 0:05:48.080 A bit further. So two thousand and nine when the 0:05:48.120 --> 0:05:51.080 GFC hit, that's when rates really leapt forward. I think 0:05:51.080 --> 0:05:54.080 we're talking in high sevens, yeah at that time, so 0:05:54.480 --> 0:05:56.479 you know they're a bit higher now. But I also 0:05:56.600 --> 0:05:59.920 think that was a bit unnecessary, particularly in November. Cash 0:06:00.320 --> 0:06:04.159 increase from the RBA was totally unnecessary. But even though 0:06:04.160 --> 0:06:06.680 with all the inflation figure changes, there's no way they'd 0:06:06.720 --> 0:06:10.479 take that back. But it was unnecessary and unfortunate. But look, 0:06:10.520 --> 0:06:13.840 if you're low sixers, you're good in terms of what 0:06:13.880 --> 0:06:16.440 else is on at the moment, not a great deal. 0:06:16.480 --> 0:06:19.800 There's a bit more variety in terms of options for 0:06:19.839 --> 0:06:23.080 self employed borrowers, which I find really exciting. It's helping 0:06:23.120 --> 0:06:25.240 a lot of a lot of those small businesses who 0:06:25.240 --> 0:06:27.600 have got different types of setups in their business and 0:06:27.720 --> 0:06:29.600 you know, maybe have done it tough for the previous 0:06:30.160 --> 0:06:32.920 year or two in the back of COVID or during COVID, 0:06:32.960 --> 0:06:34.920 and now they're in a good place. So there's some 0:06:35.320 --> 0:06:38.320 credit policy that's opening up access to credit for them. 0:06:38.360 --> 0:06:40.480 That's become a bit easier. So there's a few different 0:06:40.520 --> 0:06:43.200 products around that space, and I think that's really good. 0:06:43.320 --> 0:06:45.360 It's giving some small businesses a bit of a leg 0:06:45.440 --> 0:06:46.200 up that they need. 0:06:46.920 --> 0:06:49.400 All right, So we now know that if you have 0:06:49.520 --> 0:06:51.760 an interest rate in the low sixes, you're in a 0:06:51.760 --> 0:06:55.640 pretty good deal. I heard that some banks have actually 0:06:55.720 --> 0:06:59.000 already started dropping their rates, even though we haven't actually 0:06:59.040 --> 0:07:02.800 seen any official cuts yet from the RBA. But these 0:07:02.800 --> 0:07:06.400 new deals are only for new customers. This seems really unfair, 0:07:06.600 --> 0:07:07.880 So what's going on. 0:07:08.480 --> 0:07:11.640 Yeah, look, it's no different. That's the way it's been 0:07:11.800 --> 0:07:16.320 always been. Banks and lenders will target new customers and 0:07:16.360 --> 0:07:19.480 they'll market their new rates to them, and existing customers 0:07:19.520 --> 0:07:21.600 are stuck with a rate they are on, or go 0:07:21.720 --> 0:07:24.240 back and ask for a better discount. You won't always 0:07:24.240 --> 0:07:27.400 get it, but new customers are valued more. Unfortunately, it's 0:07:27.400 --> 0:07:30.040 the same in the employment sector. You know, generally you 0:07:30.960 --> 0:07:32.520 go to a new employer and you're going to get 0:07:32.680 --> 0:07:36.320 valued for your new skills more than your exist employer 0:07:36.360 --> 0:07:38.680 might give you a pay increase for we live. 0:07:38.560 --> 0:07:41.040 In such a fickle, two faced, shallow world. 0:07:42.120 --> 0:07:44.880 No, it's not right, but there are ways around it, 0:07:45.960 --> 0:07:47.640 you know. You can you can approach your lender and 0:07:47.680 --> 0:07:52.200 ask for a better discount. You can bluff, politely, bluff 0:07:52.240 --> 0:07:56.800 that you're leaving. You know, it's a funny one. You're 0:07:56.840 --> 0:07:59.200 threatening a bank that you're going to leave. You know. 0:07:59.360 --> 0:08:02.280 Hear the ads on on radio bit about that they 0:08:02.280 --> 0:08:05.240 don't really care. You're just a number drop in the 0:08:05.240 --> 0:08:08.920 ocean essentially, which is sad. But some banks do it 0:08:08.960 --> 0:08:11.520 really well, and some smaller lenders do it really well. 0:08:11.640 --> 0:08:15.440 They value their existing clients customers. It won't necessarily mean 0:08:15.440 --> 0:08:17.800 they'll just go to market and offer everyone the lowest, 0:08:17.840 --> 0:08:18.320 same rate. 0:08:18.400 --> 0:08:22.840 You've got to ask if you don't care, now, what 0:08:22.920 --> 0:08:26.280 size mortgage can you start asking for a bigger discount? 0:08:26.400 --> 0:08:27.080 Like over a. 0:08:27.040 --> 0:08:29.720 Million, two million, ten million. 0:08:29.920 --> 0:08:33.600 In the so, if you're a new new de bank customer, 0:08:33.679 --> 0:08:38.360 you're going to market for a new loan. Anything above well, 0:08:38.360 --> 0:08:40.680 generally they're segmented, so it's above two hundred and fifty 0:08:40.760 --> 0:08:43.960 k five hundred k seven to fifty million, above a million, 0:08:44.160 --> 0:08:46.680 then it's free for all. So it's basically you're in 0:08:46.720 --> 0:08:49.280 that top top level that the banks look for. Above 0:08:49.320 --> 0:08:52.920 that they will offer some discretionary discounts, but generally above 0:08:52.920 --> 0:08:55.199 a million is where you get into that state of 0:08:55.800 --> 0:08:58.280 that extra discount if you're loaned to value ratio is right? 0:08:58.320 --> 0:09:00.280 So if you've got good equity in your property. 0:09:00.679 --> 0:09:02.559 Is that what we call private banking level? 0:09:02.840 --> 0:09:06.120 No? No, it's just a million dollars. Isn't much anymore? 0:09:06.160 --> 0:09:10.960 Is it? No? A bit of a shock to say that, 0:09:10.960 --> 0:09:16.000 But it's not particularly in Sydney. So meand all alone 0:09:16.080 --> 0:09:19.360 is he's not far away from the norm? Wow? 0:09:20.360 --> 0:09:23.880 All right? As an everyday customer, how do we actually 0:09:23.920 --> 0:09:26.000 ask the bank for a better deal? 0:09:26.080 --> 0:09:26.200 Like? 0:09:26.240 --> 0:09:26.560 What? 0:09:26.559 --> 0:09:26.760 What? 0:09:27.480 --> 0:09:29.400 How do we have this conversation? Like is there a 0:09:29.440 --> 0:09:32.440 script that we should be using or is there a 0:09:32.440 --> 0:09:35.120 particular key terminology that we should be using so that 0:09:35.120 --> 0:09:37.760 the bank know that we know what we're talking about, 0:09:37.840 --> 0:09:40.480 even though we may not necessarily like what's the best 0:09:40.480 --> 0:09:44.280 way to approach this, you know, respectfully and professionally? 0:09:44.760 --> 0:09:49.720 Well, as I said earlier, bluff politely, it's just a 0:09:49.720 --> 0:09:54.280 conversation that I'm yourself, go, you know, understand what is 0:09:54.280 --> 0:09:56.120 out there? In the market, what the lower rates are. 0:09:56.400 --> 0:09:58.079 Have that written down, so when the phone call to 0:09:58.120 --> 0:10:00.400 the bank, your bank, you call them and you ask 0:10:00.640 --> 0:10:03.640 for a better discount. You know, the longer you've been there, 0:10:03.679 --> 0:10:06.560 the more chance that you'll get an extra discount. And 0:10:06.640 --> 0:10:09.120 if you understand what the market rates out there are, 0:10:09.160 --> 0:10:10.880 and you can convey that to them to them in 0:10:10.920 --> 0:10:14.120 a conversation, you're a chance of getting it. Maybe not 0:10:14.160 --> 0:10:16.360 on that phone call. You might then need to push 0:10:16.400 --> 0:10:19.319 it at another level and threatened to leave that you're 0:10:19.320 --> 0:10:21.400 going to leave and go to a different bank, in 0:10:21.440 --> 0:10:23.640 which case they might refer you to their attention team, 0:10:23.800 --> 0:10:26.439 who will then look at your rate, and if you're 0:10:26.480 --> 0:10:28.520 on a good rate, they won't just give you a discount, 0:10:28.559 --> 0:10:30.000 and I'll just say, sorry, you're in a good rate. 0:10:30.400 --> 0:10:32.480 We're not offering you extra. If you want to leave, 0:10:32.520 --> 0:10:35.000 then we'd be sorry to see you go, but see 0:10:35.000 --> 0:10:37.320 you later. But if you are on a higher rate 0:10:37.400 --> 0:10:39.400 and there's room to give you a better discount, they 0:10:39.440 --> 0:10:42.120 should They won't always do it, but the longer you've 0:10:42.160 --> 0:10:44.960 been there, the better chance you are of getting that discount. 0:10:45.000 --> 0:10:46.960 And if it's been a long period of time since 0:10:46.960 --> 0:10:48.800 you've asked for one before, or if you've never asked 0:10:48.800 --> 0:10:49.520 for one before. 0:10:50.240 --> 0:10:51.840 Is it better to get a mortgage broker to do 0:10:51.880 --> 0:10:52.320 this for you? 0:10:53.440 --> 0:10:57.240 It is not all brokers will do that. I mean 0:10:57.320 --> 0:10:59.280 as part of once you're just in kind of mind, 0:10:59.320 --> 0:11:00.720 we do that every twelve. 0:11:00.520 --> 0:11:05.559 Months and more automatically without even asking to the customers. 0:11:05.800 --> 0:11:09.920 Yes, yes, we approach those lenders regally for better discounts. 0:11:09.960 --> 0:11:12.760 Actually, you've called me before and randomly and said, hey, 0:11:12.760 --> 0:11:14.599 I've just spoken to the bank. I'm just getting you 0:11:14.679 --> 0:11:16.920 a discount of X basis points. 0:11:17.040 --> 0:11:19.400 Yeah, yeah, Look, it's just part of this ongoing service. 0:11:19.440 --> 0:11:22.000 But not every broker will do that for you if 0:11:22.000 --> 0:11:24.120 you're not on there, if you're not a customer or 0:11:24.120 --> 0:11:28.960 a client. Sorry, So it is best to be an 0:11:28.960 --> 0:11:31.520 ongoing customer of that broker, and the broker should regularly 0:11:31.520 --> 0:11:33.559 do that for you. But if not, you don't necessarily 0:11:33.640 --> 0:11:35.320 need to have a broker do it for you, and 0:11:35.360 --> 0:11:37.559 it won't necessarily get your better results either. 0:11:38.360 --> 0:11:41.719 I do like that idea. With a bank, you're a customer. 0:11:41.960 --> 0:11:44.680 With a mortgage broker, you're a client, it's a lot more. 0:11:44.880 --> 0:11:49.640 It's a far more valuable relationship. Absolutely, that has potential 0:11:49.679 --> 0:11:52.120 to save tens of thousands of dollars in interest, if 0:11:52.160 --> 0:11:54.280 not one hundreds of thousands of dollars of interest in 0:11:54.559 --> 0:11:55.560 valuable time. 0:11:55.480 --> 0:11:58.840 Purely unbiased advice. And we're constantly you know, everything that 0:11:58.880 --> 0:12:00.679 we do is built around them what's best in your 0:12:01.040 --> 0:12:03.520 best interest, not particular Linda or a bank. 0:12:03.920 --> 0:12:06.320 And do you charge when you go and call up 0:12:06.360 --> 0:12:08.160 a bank on your client's behalf? 0:12:08.440 --> 0:12:10.959 No, we don't charge fees at all. We're paid. That's 0:12:11.000 --> 0:12:12.960 part of the commission structure that we've got, you know, 0:12:13.080 --> 0:12:14.800 with an upfront payment from the loan that we do 0:12:14.840 --> 0:12:18.440 and then an ongoing trial commission, which is you know, 0:12:21.160 --> 0:12:24.080 public knowledge. Now you know, we don't hide from that, 0:12:24.160 --> 0:12:26.960 and that's explained in our credit proposal documents that we 0:12:27.000 --> 0:12:29.440 issue our clients as well, so that all that service 0:12:29.520 --> 0:12:31.599 is part of the commissions we get paid. 0:12:31.400 --> 0:12:33.080 And that's all very transparent as well. 0:12:33.120 --> 0:12:34.720 Absolutely, Yeah, it must be. 0:12:35.320 --> 0:12:40.199 How important is it to have an experienced mortgage broker 0:12:40.640 --> 0:12:44.440 having that high sort of contact rate or human contact 0:12:44.520 --> 0:12:47.800 rate up the food chain within a bank for complex 0:12:48.440 --> 0:12:50.280 applications or situations. 0:12:50.360 --> 0:12:54.679 Yeah, that's critical, and we don't always have that contact 0:12:55.160 --> 0:12:58.400 higher up, but it's it could be someone on the 0:12:58.400 --> 0:13:01.400 lower level who knows someone or just your relationships within 0:13:01.440 --> 0:13:05.120 that bank can get you there, because you know, bank 0:13:05.160 --> 0:13:08.520 credit officers who approve these loans the human They make 0:13:08.600 --> 0:13:11.520 human errors, and they don't know the customer or our 0:13:11.559 --> 0:13:14.680 client as well as we do. So it's really important 0:13:14.679 --> 0:13:16.679 to be able to get the message across about a 0:13:16.720 --> 0:13:20.640 customer if the credit officer doesn't necessarily understand the transaction 0:13:20.800 --> 0:13:23.680 or how their income is derived. So it's really important 0:13:23.679 --> 0:13:25.920 for us to have access in those situations to get 0:13:25.920 --> 0:13:28.200 the message across and help get the right result for 0:13:28.240 --> 0:13:28.720 our client. 0:13:29.320 --> 0:13:32.280 Okay, Now, for some listeners who've still got some pesky 0:13:32.360 --> 0:13:36.800 credit card debt leftover from Christmas time or the school 0:13:36.800 --> 0:13:40.080 holidays that they haven't been able to get back on 0:13:40.160 --> 0:13:43.160 top of, what are your thoughts about sort of drawing 0:13:43.160 --> 0:13:47.520 a line the sand, consolidating that debt and starting again. 0:13:48.040 --> 0:13:50.160 You know, can you do this yourself directly with your 0:13:50.200 --> 0:13:52.320 bank or do you need to speak to your mortgage 0:13:52.360 --> 0:13:54.040 broker about you know, refinancing. 0:13:55.640 --> 0:14:00.200 Oh look, you ken, it's a funny one. Credit cards. 0:14:00.800 --> 0:14:02.640 You don't want to be getting into a habit of 0:14:02.640 --> 0:14:04.760 consolidating credit cards into a mortgage. 0:14:04.840 --> 0:14:05.880 That's why you need a budget. 0:14:06.000 --> 0:14:08.880 Yeah, correct, And look, if you're trying to do it yourself, 0:14:08.920 --> 0:14:10.800 and if you've just come off an expensive Christmas and 0:14:10.800 --> 0:14:13.560 they're looking at your expenses, then the bank might knock 0:14:13.559 --> 0:14:16.319 you back and say, look, your budget is much higher 0:14:17.559 --> 0:14:19.920 than what you've stated based on your spending. But if 0:14:19.920 --> 0:14:21.640 that was only a one off month of spending, then 0:14:21.640 --> 0:14:23.920 you should be able to explain that. But going direct 0:14:24.120 --> 0:14:25.840 you may not get the right result that a broker 0:14:25.880 --> 0:14:30.760 would by being able to explain that upfront. So credit cards, 0:14:30.920 --> 0:14:33.240 if you can consolidate it, I'd either keep it as 0:14:33.240 --> 0:14:36.040 a separate loan amount. You know, if it's say fifteen k, 0:14:36.080 --> 0:14:39.280 you get a twenty k loan to clear those credit cards, 0:14:39.320 --> 0:14:41.760 and then you pay that thing off in two three 0:14:41.840 --> 0:14:44.840 years if you can as quickly as possible, because consolidating 0:14:44.880 --> 0:14:48.560 a small short term debt over a long term loan 0:14:48.600 --> 0:14:51.480 facility means you're paying interest on that Christmas for the 0:14:51.560 --> 0:14:53.600 next twenty five years. Not ideal. 0:14:53.840 --> 0:14:58.080 Yeah, all right, what's your best advice for just again, 0:14:58.120 --> 0:15:00.280 all right? What's your best advice to people who want 0:15:00.320 --> 0:15:02.920 to try and pay their mortgage off as quickly as possible, 0:15:02.960 --> 0:15:04.720 which I will add is a brilliant goal to have. 0:15:05.320 --> 0:15:08.040 Yeah, look, as we spoke about earlier, so constantly managing 0:15:08.040 --> 0:15:11.680 the budget, reviewing your budget and putting whatever surplus savings 0:15:11.680 --> 0:15:13.720 you've got from that budget into your mortgage where it's 0:15:13.720 --> 0:15:17.080 into your offset or your redraw. Offset and redraw can 0:15:17.120 --> 0:15:20.080 have a huge impact on interest savings over the long term. 0:15:20.520 --> 0:15:22.600 I think I actually saw something on your Instagram account 0:15:22.640 --> 0:15:25.760 where forty thousand dollars in an offset account or a 0:15:25.760 --> 0:15:28.720 redraw facility for a four hundred thousand dollars I think, 0:15:28.800 --> 0:15:30.280 like I say, six and a half percent interest rate 0:15:30.360 --> 0:15:33.720 saves like over one hundred thousand dollars in interest two 0:15:33.760 --> 0:15:36.120 years off homeland, which is I mean people who have 0:15:36.160 --> 0:15:38.360 emergency money sitting at a separate savings account and still 0:15:38.360 --> 0:15:40.720 against their home loan like matters. 0:15:40.880 --> 0:15:44.359 Yeah, you don't realize because when you're talking about extrapolating 0:15:44.360 --> 0:15:47.280 those savings over the twenty five thirty years, it's huge. 0:15:47.800 --> 0:15:51.120 So and some some clients I see and speak to, 0:15:51.240 --> 0:15:54.840 I've got savings account, I gr savings account Mcquarie. They've 0:15:54.840 --> 0:15:57.080 got their homelane and they've got an offset, They've got 0:15:57.080 --> 0:15:58.480 a little bit in their offset, but then they've got 0:15:58.520 --> 0:16:03.840 savings in other banks for rainy day or emergency. 0:16:04.160 --> 0:16:06.360 You know, we talked about Michael Thompson from how to 0:16:06.400 --> 0:16:10.760 theyre for that is twenty three different savings accounts. 0:16:10.440 --> 0:16:13.400 We've got, We've got you know, we've got access to 0:16:14.600 --> 0:16:18.120 credit or access to funds via our smartphones, so you 0:16:18.120 --> 0:16:20.600 can instantly transfer money around so that that need for 0:16:21.080 --> 0:16:23.840 emergency accounts in that other banks doesn't really exist anymore. 0:16:23.920 --> 0:16:25.520 And then if you're any interest on that, you're paying 0:16:25.560 --> 0:16:28.080 tax on it. Yeah, you know, it's much better used 0:16:28.080 --> 0:16:29.880 in an offset or in your redial account. 0:16:30.080 --> 0:16:32.920 Exactly. All right, coming up to the end, I've got 0:16:32.920 --> 0:16:36.200 a couple more questions, and these ones I am intrigued 0:16:36.320 --> 0:16:38.200 with your aunts. Oh sorry, you're sorry. 0:16:38.520 --> 0:16:42.040 Yeah. So another another thing to remember in something that 0:16:42.080 --> 0:16:46.680 I that I see often is you know clients who 0:16:46.760 --> 0:16:49.760 want to pay their loan off before they invest. You know, 0:16:49.840 --> 0:16:51.560 if you think you've got some room to invest in 0:16:51.560 --> 0:16:53.000 your cash flow and your budget and you want to 0:16:53.040 --> 0:16:55.520 plan for your retirement, do it. And that's something that 0:16:55.560 --> 0:16:57.760 we can help. We can help with. Borrowing to invest 0:16:57.800 --> 0:16:59.720 can help reduce your taxes, so you get a large 0:16:59.720 --> 0:17:01.880 attack refund every year. You use that to help pay 0:17:01.880 --> 0:17:04.400 off your home loan. You know, we consider the home 0:17:04.440 --> 0:17:07.320 we call the homeland bad debt investment line good debt. 0:17:07.440 --> 0:17:09.439 That's one way of doing it as long as you 0:17:09.440 --> 0:17:11.679 can afford it, and then it's much better to do 0:17:11.720 --> 0:17:13.639 it that way than to pay your loan off and 0:17:13.680 --> 0:17:16.400 then in the last ten years of your working life 0:17:16.400 --> 0:17:19.320 trying to invest and scrape together the money to you know, 0:17:19.440 --> 0:17:21.440 to buy, You're not holding it as long term as 0:17:21.440 --> 0:17:24.159 you could, so ideally you want to be investing earlier. 0:17:24.200 --> 0:17:26.280 That's another way to help pay off you your mortgage 0:17:26.320 --> 0:17:27.000 earlier as well. 0:17:27.600 --> 0:17:29.760 I think debt recycling is one of my favorite topics 0:17:29.800 --> 0:17:31.399 to talk about, so I feel like we need to 0:17:31.400 --> 0:17:37.240 do maybe a special Ask Adam debt recycling episode. So 0:17:37.359 --> 0:17:39.440 for the listeners right now, I want to hear that episode. 0:17:39.440 --> 0:17:41.199 Can you please make sure that when you're leaving us 0:17:41.200 --> 0:17:43.439 a rating a review, that you state that so that 0:17:43.480 --> 0:17:46.760 I can prioritize this particular episode as quickly as possible 0:17:46.840 --> 0:17:50.160 for you. All right? Next question is if we happen 0:17:50.240 --> 0:17:53.040 to get an interest rate cut a little bit sooner 0:17:53.040 --> 0:17:56.840 than anticipated, how do we use that cut to our 0:17:56.880 --> 0:17:58.960 advantage if we have a mortgage free goal. 0:18:00.040 --> 0:18:03.520 Your repayment's the same, so you'll start getting ahead and 0:18:03.560 --> 0:18:05.600 that can be invaluable. You know, I've had I've had 0:18:06.800 --> 0:18:10.120 examples of currents who lost their job or got run 0:18:10.160 --> 0:18:12.119 well and had some long term health issues so it 0:18:12.160 --> 0:18:14.800 couldn't work. So being ahead a couple of years on 0:18:14.840 --> 0:18:17.520 their mortgage was enormous. Keep the stress out of that 0:18:17.840 --> 0:18:21.520 of that situation for them. So I'd always recommend trying 0:18:21.520 --> 0:18:24.760 to keep your repayments the same regardless of how many 0:18:24.800 --> 0:18:27.120 rate cuts you get. You'll know then you'll really start 0:18:27.160 --> 0:18:30.359 smashing your mortgage debt. Your debt recycling is the other 0:18:30.400 --> 0:18:32.800 one you spoke about earlier. If you if you can 0:18:33.000 --> 0:18:36.919 then pay off extra through the rate cuts, split a 0:18:36.920 --> 0:18:39.360 bit of split a bit off your mortgage debt, recycle, 0:18:39.440 --> 0:18:43.360 go and invest. Yeah, that's another good way as well. 0:18:43.400 --> 0:18:45.879 All Right, I have this last question. It's a burning 0:18:45.960 --> 0:18:48.760 question of mine, and it's the reason why I've come 0:18:48.840 --> 0:18:50.960 up with this question is I'm starting to see a 0:18:51.000 --> 0:18:54.240 lot of mortgage brokers popping up on social media, and 0:18:54.320 --> 0:18:59.520 some of the things that I'm seeing are actually I 0:18:59.560 --> 0:19:04.919 would say incorrect, but they're questionable. So and you know, 0:19:04.960 --> 0:19:07.560 if you don't know, this was obviously I do. Being 0:19:07.600 --> 0:19:10.199 a financial planner, you could very innotantly assume that this 0:19:10.240 --> 0:19:13.280 person is experienced as a mortgage broker and knows what 0:19:13.280 --> 0:19:16.520