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Speaker 1: She's on the Money. She's on the Money.

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Speaker 2: Hello and welcome to She's on the Money, the podcast

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Speaker 2: for millennials who want financial freedom mortgage refinancing, How do

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Speaker 2: we do it? How can it help us financially? And

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Speaker 2: what are the costly mistakes homeowners continue to make in

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Speaker 2: this space. My name is Georgia King, and joining me

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Speaker 2: to reveal all is, of course, financial advisor Victoria define

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Speaker 2: V for any unknowing non homeowners like my good self.

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Speaker 2: What are we actually referring to when we talk about

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Speaker 2: refinancing our mortgage?

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Speaker 3: It sounds fancy, doesn't happen, but essentially, simply port refinance

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Speaker 3: is when you transfer your home loan from one bank

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Speaker 3: call lender to a different bank call lender. You could

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Speaker 3: even go from current lender to current lender, but you're

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Speaker 3: changing your banking product and refinancing the loan. That said,

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Speaker 3: the reason you refinance is usually to try and get

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Speaker 3: a lower interest rate or a better deal, or like

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Speaker 3: a sign up bonus or some benefit to actually, you know,

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Speaker 3: putting your loan with another bank or with another banking product,

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Speaker 3: or you could even be refinancing and decide not to

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Speaker 3: refinance completely. You just call up hustle your current bank.

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Speaker 3: Can they give you a better deal because you've threatened

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Speaker 3: the process.

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Speaker 2: Okay, So it's like it's restructuring the loan that we have,

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Speaker 2: be that with our current lender or with a new lender,

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Speaker 2: to score ourselves a better deal.

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Speaker 3: Yes, sir, that is exactly what that means.

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Speaker 2: We've nailed it all right, wrap the end of podcasts.

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Speaker 3: See you guys later.

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Speaker 2: Okay, So saving money is what we're here for. That's

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Speaker 2: that's why we wait. Refinance way, how does it technically

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Speaker 2: save us cash? Though?

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Speaker 3: There are a heap of ways it can save you cash.

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Speaker 3: So first things first, it could and this one comes

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Speaker 3: with a massive caveat, and I'll explain after I tell

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Speaker 3: you what the point is stored. But number one is

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Speaker 3: it reduces your repayments. So that's a money win because

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Speaker 3: obviously the less interest you're paying, the more money saved.

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Speaker 3: But we also need to be really careful because your

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Speaker 3: repayments might decrease over time. But massive caveat just because

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Speaker 3: your repayments decreased. So George, say your mortgage, your payments

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Speaker 3: one thousand dollars a month, and you go refinance you'll loan.

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Speaker 3: You're like money win. It's now eight hundred bucks a month.

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Speaker 3: We need to be really careful about how long that

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Speaker 3: term is score And maybe we're saving money in the

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Speaker 3: short term because our monthly repayments are lower, but our

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Speaker 3: long term over the term of the loan is longer.

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Speaker 3: So we need to just be careful. And I know

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Speaker 3: you're going to ask me later what the downfall is,

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Speaker 3: but I feel like I need to say it at

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Speaker 3: the same time. Is that too cheeky?

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Speaker 2: No, it's good, it's good. Let's really drive it home.

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Speaker 3: Sorry, sorry, sorry. The next is you could pay your

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Speaker 3: home loan office. That's a good idea. Everybody wants that.

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Speaker 3: So not needing to pay extra for additional interest means

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Speaker 3: that you can actually funnel more cash towards your loan

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Speaker 3: and pay off your property sooner. And that kind of

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Speaker 3: links to number one, where you're reducing your payments. Maybe

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Speaker 3: you reduce your payments and what your minimum spend is,

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Speaker 3: so it goes from one thousand dollars a month down

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Speaker 3: to eight hundred dollars a month, but you continue at

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Speaker 3: one thousand dollars a month and you get out of

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Speaker 3: your home loan faster. We love that. We do another

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Speaker 3: reason why people might refinance, and I've seen a fair

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Speaker 3: bit of this recently, is actually debt consolidation, so you

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Speaker 3: might have a home loan as well as like a

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Speaker 3: car loan and maybe a small personal loan. Especially having

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Speaker 3: gone through COVID, I feel like that's a really common

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Speaker 3: thing to have, you know, experienced in the last few years.

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Speaker 3: And as we've spoken about before, making multiple payments at

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Speaker 3: multiple different interest rates might not always be in your

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Speaker 3: best interests, so you might refinance to kind of drag

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Speaker 3: that car loan and that personal loan into your home

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Speaker 3: home loan, so you have one repayment and one debt

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Speaker 3: as opposed to a few with different interest rates, and

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Speaker 3: you would have a lower interest rate across the board.

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Speaker 3: There are obviously, again lots of caveats to that, and

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Speaker 3: you can't always do it, so definitely comb through see

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Speaker 3: if that's an option for you. But that's a reason

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Speaker 3: why people might want to refinance. And ju King, this

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Speaker 3: is the sexiest of options that you're ready. You didn't

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Speaker 3: sound as ready as I wanted to say, girl Ah,

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Speaker 3: thanks George. That wasn't scripted at all. No, we don't

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Speaker 3: script is that obvious, but that sexy option, and I

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Speaker 3: think it is sexy, is accessing equity. So equity is

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Speaker 3: the money that is locked into our home loan that

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Speaker 3: we can potentially access to either invest or renovate our

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Speaker 3: properties or buy more properties. And that is the sexy

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Speaker 3: thing when it comes to a mortgage, right, Like, we

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Speaker 3: want to have a mortgage that essentially is lower than

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Speaker 3: what the property is valued at, so that we can

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Speaker 3: either access equity or just have equity because it is nice.

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Speaker 3: So instead of needing a cash deposit on your future

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Speaker 3: investment property, you could actually just use home equity, which

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Speaker 3: can help you increase your net worth, which Jay sounds sexy.

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Speaker 3: We do have to be careful with it. Again, there's

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Speaker 3: lots of caveats, but that was the sexiest of options

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Speaker 3: and I left it to the last.

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Speaker 2: Foy stunning, Okay, So that's how it saves us cash.

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Speaker 2: I'm going to sound like an absolute sausage here a tweet.

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Speaker 2: I love that word. Can you tell me a little

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Speaker 2: bit more about equity because this is I am kind

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Speaker 2: of new to this idea. How many properties can you

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Speaker 2: buy with one property? What is this?

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Speaker 3: Well, equity is one of those things that I think

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Speaker 3: feels elusive, but once you own property, it's something that

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Speaker 3: you know, after a certain period of time you might

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Speaker 3: have especially in this property market where it's gone up

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Speaker 3: so significantly. Like George, if you'd purchased a property on

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Speaker 3: the Mornington Peninsula, which is very local to George and I. George,

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Speaker 3: you live on the morning To Peninsula, I am from

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Speaker 3: the morning to Finicula, so we know it really well.

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Speaker 3: But if you've purchased it twelve months ago, your property

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Speaker 3: might have increased by thirty percent. Like that is pretty

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Speaker 3: crazy to think that property prices would increase, but the

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Speaker 3: value there is that has given a lot of people

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Speaker 3: who purchased twelve months ago a whole heap of equity

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Speaker 3: in their properties because their properties are worth more than

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Speaker 3: what the loans they have on them are. So that's

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Speaker 3: kind of sexy. So, whether you're looking to invest in

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Speaker 3: property or renovate, or maybe even pay off some debt

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Speaker 3: or pay for something big, or maybe you want to

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Speaker 3: borrow against the equity in your home to buy another investment,

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Speaker 3: property equity is something that, from my perspective, is a

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Speaker 3: super valuable resource. But it's one of those things that

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Speaker 3: I think we need to understand because it's not given like,

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Speaker 3: just because you have a home loan doesn't mean you

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Speaker 3: automatically have equity. So home equity refers to the current

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Speaker 3: market value of your home, which won't necessarily be the

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Speaker 3: price that you purchased it for minus the amount of

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Speaker 3: money that you still on your home loan. So to

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Speaker 3: give you a quick example, because starts gal, but this

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Speaker 3: is in the stat Say your house on the morning

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Speaker 3: to Ninjula is worth eight hundred thousand dollars and you've

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Speaker 3: paid off so much George because she's on the money

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Speaker 3: pays you so well, and you owe three hundred thousand

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Speaker 3: dollars on that property. That's all you've got left to

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Speaker 3: pay off. You're gonna have, or you'll be in a

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Speaker 3: position of having five hundred thousand dollars worth.

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Speaker 2: Of equity in that property.

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Speaker 3: Okay, So you need to obviously keep in mind things

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Speaker 3: like market value. Obviously that can go up and down,

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Speaker 3: so the equity you have might rise and fall. Because

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Speaker 3: if the property market goes down and that property ends

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Speaker 3: up being valued three hundred thousand dollars, you don't have

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Speaker 3: any equity. Does that make sense?

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Speaker 2: It does.

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Speaker 3: So equity is something that you know you could guestimate

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Speaker 3: what it is. You might go, oh, look the house

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Speaker 3: down the street that's of eight hundred grand, but we

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Speaker 3: paid five hundred and only, oh, you know, three hundred left.

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Speaker 3: Then you're guestimating what your equity is. So to find

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Speaker 3: out how much equity you have in your property, it's

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Speaker 3: a good idea to just have a chat to a

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Speaker 3: more mortgage broker who can find you someone who can

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Speaker 3: actually value the property properly, if that makes sense, Like

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Speaker 3: you can't just google it and be like, oh, well,

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Speaker 3: Google said that this is what it's worth. Like that's

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Speaker 3: not helpful.

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Speaker 2: You're constructive because it.

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Speaker 3: Might be different. So with that in mind, I think

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Speaker 3: it's really important for us to understand what equity is

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Speaker 3: and whether it's usable or not. But the thing with

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Speaker 3: equity is you could pull some of that out. Like

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Speaker 3: you can't just go, ah, right, Victoria, I've got five

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Speaker 3: hundred thousand dollars of equity. I'm going to rip that

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Speaker 3: out and use it. But you definitely could go to

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Speaker 3: a bank and be like, hey, mister bank man, I

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Speaker 3: would like to purchase an investment property and they'll go, Geeve,

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Speaker 3: you've got a deposit. You go, no, sir, I have

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Speaker 3: equity and they go, oh, nice, how much of you got,

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Speaker 3: And you'll say, oh, about five hundred thousand dollars worth

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Speaker 3: of equity, and they'll do all of their calculations, and

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Speaker 3: in lieu of a deposit, you might be able to

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Speaker 3: use that equity in your property instead of having to

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Speaker 3: save up again for a house deposit.

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Speaker 2: Right, And so is this how most people by their

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Speaker 2: second and third properties, like they're not saving more deposits.

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Speaker 3: Or sometimes okay, so sometimes yes, sometimes no. I mean,

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Speaker 3: if your property hasn't increased in value and you've only

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Speaker 3: been paying the interest component of a loan off, then

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Speaker 3: you're going to owe what the property's worth and you're

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Speaker 3: not really going to have any equity to use. But

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Speaker 3: in the current property market, yeah, lots of people are

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Speaker 3: using equity, especially you know, I've given the example of

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Speaker 3: the Morning to Beninsula, which is I would say a

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Speaker 3: ninch niche, but I called it ninchhift. No, you know,

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Speaker 3: kind of example. But I think it's one of those

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Speaker 3: things where lots of places around the country at the

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Speaker 3: moment have increased in like such dramatic ways. And yeah,

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Speaker 3: it's not uncommon to use it, but I think that

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Speaker 3: a lot of people, especially if you're a first home

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Speaker 3: buyer and that was such a big stepping stone and

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Speaker 3: it took you like ten years to save for your

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Speaker 3: first home, you're not even going to think that another

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Speaker 3: home might be closer than you think it is. But

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Speaker 3: it could be very lucky, very privileged.

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Speaker 2: But we love that for our community indeed, And is

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Speaker 2: it true that you can also use equity for renovations.

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Speaker 2: I feel like I've read that somewhere, sir.

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Speaker 3: You absolutely can refinance and get some cash holder out

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Speaker 3: to pay for trades on your house, and banks quite

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Speaker 3: like that because you're increasing the value of the asset

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Speaker 3: that they still technically own, right, So not a bad idea,

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Speaker 3: but at the same time, we really want to be

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Speaker 3: making sure that if you're looking at a home, and

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Speaker 3: this is what I'm going through at the moment, George,

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Speaker 3: And this isn't the Property Playbook podcast, but you absolutely

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Speaker 3: should go and check that out if you're into property.

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Speaker 3: And I'll be speaking a lot in the next few

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Speaker 3: months about my personal property journey. But when it comes

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Speaker 3: to you know, the reno that I'm about to do,

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Speaker 3: which is very exciting, we've just signed off on it, George.

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Speaker 3: We've tried really hard to make sure we know what

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Speaker 3: to invest, which I at the start was like, well,

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Speaker 3: how do you do that? I don't know? We paid

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Speaker 3: X for it, like renovations could be all the way

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Speaker 3: up to like a million dollars, Like it's we're not

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Speaker 3: spending million dollars. But you know, you look at it

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Speaker 3: and you go, we have a single story property. How

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Speaker 3: much is that going to cost to do new bathrooms

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Speaker 3: and new kitchen, which we actually have to do because

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Speaker 3: they're falling apart. But you go, how much can we afford?

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Speaker 3: And you look at the equity and the property value

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Speaker 3: and how much that is worth. And we've worked out

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Speaker 3: what we're comfortable investing into the renovation so that we

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Speaker 3: don't over capitalize on the property. So over capitalization happens

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Speaker 3: when say you purchased your property, George for the eight

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Speaker 3: hundred thousand dollars we're talking about before, and a bank

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Speaker 3: would go, yes, your your property's worth eight hundred grand,

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Speaker 3: But you go, V, I want to put a pool in,

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Speaker 3: I want to get a brand new spank in kitchen,

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Speaker 3: I want some bathrooms. And you spend two hundred thousand

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Speaker 3: dollars on the property, so technically you paid eight hundred

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Speaker 3: thousand dollars for the property, and now you've technically got

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Speaker 3: a million dollar property, but it's still only worth eight

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Speaker 3: hundred thousand dollars. That's what over capitalization is best, more

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Speaker 3: in the property than what it is worth. Interesting, I'm

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Speaker 3: trying very hard to make sure that doesn't happen. And

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Speaker 3: in the area we've bought, we've got, you know, I'm

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Speaker 3: very grateful for it. But we've got this I think,

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Speaker 3: really cute little house that does need a lot of work.

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Speaker 3: But you know, talking through our options with a builder,

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Speaker 3: we realized very quickly that putting a second story on

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Speaker 3: our house was never going to be an option because

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Speaker 3: it would have made the property and how much we

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Speaker 3: were spending on the property, it would have been so

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Speaker 3: much more money than what the property would be worth

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Speaker 3: even if we did that extension.

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Speaker 2: Does that make sense?

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Speaker 3: So it's interesting to talk these things through because I

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Speaker 3: think a lot of people would just assume, oh, if

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Speaker 3: you whack another story on there, it'd be worth more money. Right, No,

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Speaker 3: that's not how it works. And I was a surprised,

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Speaker 3: as too are Georgia King.

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Speaker 2: Okay, there we go, let's move back to refinancing fee. Yes,

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Speaker 2: at what point in the That's what this episode was about.

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Speaker 2: Apparently we've got a little to the left. At what

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Speaker 2: points should we consider refinancing?

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Speaker 3: Okay, so there are a few times at which you

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Speaker 3: should be talking about this, right, And the first thing

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Speaker 3: you want to do is make sure that your loan

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Speaker 3: isn't tied up for a period of time. And the

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Speaker 3: reason I say that is because mortgage brokers, more often

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Speaker 3: than not get paid via commission, and that is not

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Speaker 3: a bad thing. It just means that the bank is

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Speaker 3: paying them so that you don't have to pay them

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Speaker 3: as much. Usually, a mortgage broker isn't going to charge

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Speaker 3: your feet unless they're like, look, George, we're gonna have

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Speaker 3: to charge for the initial consult because it's our time

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Speaker 3: and you got no problems. But essentially, a mortgage broker

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Speaker 3: gets paid when your loan settles and you get the

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Speaker 3: keys to your shiny new house. But George, that doesn't

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Speaker 3: mean that you're personally paying more. It means that the

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Speaker 3: bank is saying, hey, thanks mortgage broker for bringing this

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Speaker 3: particular client to us without us having to do any work.

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Speaker 3: We'll pay you for that client, which is really nice.

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Speaker 3: But if you refinance within the first twelve months or

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Speaker 3: the first twenty four months, a thing called clawbacks happens.

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Speaker 3: So they will claw back the commission that they paid.

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Speaker 3: So they being the bank that they paid to the

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Speaker 3: mortgage broker and say, the mortgage broker, man, that client

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Speaker 3: that you sent us, that we paid you for didn't

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Speaker 3: even last a year. We would like our money back,

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Speaker 3: And so the money is taken back off the mortgage broker,

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Speaker 3: which you might not care. I don't know. I would care.

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Speaker 3: I wouldn't want a small business impacted by, you know,

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Speaker 3: a decision that I'm making. But in your mortgage broken contracts,

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Speaker 3: it is very likely that you might have to cover

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Speaker 3: that fee.

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Speaker 2: Oh okay, so.

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Speaker 3: Beware, my friends. But if you're not in any clawback period,

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Speaker 3: that is absolutely fine. There might be a change in

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Speaker 3: interest rates you want to take up. I've seen a

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Speaker 3: lot of people come through the Zella doors recently. They're like, oh,

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Speaker 3: Matros rates four and a half percent. I'm like, my friend,

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Speaker 3: what are you doing? Sit down, let's fix that. Or

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Speaker 3: you might have a really big life event that happens

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Speaker 3: in your life and you might go, oh, starting a

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Speaker 3: new job, or someone's got sick, or we're having a baby,

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Speaker 3: and we just want to read look our finances. I

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Speaker 3: think that there are a lot of reasons we refinance.

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Speaker 3: But from my perspective, what you should be doing if

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Speaker 3: you own property and you have a mortgage is building

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Speaker 3: a really good relationship with a mortgage broker. And the

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Speaker 3: reason I say that is one, it's going to make

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Speaker 3: your job really easy because every year or a couple

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Speaker 3: of years, you shoot my text be like, hey Kate,

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Speaker 3: that's why mortgage broke is name. Hey Kate, should we

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Speaker 3: be refine? She'll quickly look up my file and be

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Speaker 3: like the you've got two point five percent interest right? No,

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Speaker 3: like I can't get any better at this point, and

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Speaker 3: I go thank you for your time, and then I'll

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Speaker 3: talk to her later. Or she might look at that

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Speaker 3: and be like, oh, yeah, actually I could probably get

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Speaker 3: you a better deal. I'm going to have a look

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Speaker 3: at it. I'll be like, yes, please. So I think

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Speaker 3: it's really important to have relationships like that because one,

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Speaker 3: it takes a responsibility off you. You're not going and

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Speaker 3: shopping around all of the big banks and working out

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Speaker 3: what's going to be best for you. Your mortgage broker

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Speaker 3: does it. And it's not going to cost you anything.

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Speaker 3: But every time you send that text and it actually

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Speaker 3: ends up being a refinance for what I would believe,

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Speaker 3: good read, your mortgage broker benefits out of it too.

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Speaker 2: Yeah, gotcha. And are there any situations where the mortgage

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Speaker 2: broker would reach out to you and be like, mate,

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Speaker 2: the rates are looking good, would you like to refinance?

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Speaker 2: Or is it more the other way around?

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Speaker 3: Okay, yes, absolutely, This is probably going to be a

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Speaker 3: contentious kind of question that you're asking G And the

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Speaker 3: reason I say that is yes, Zello brokers do so

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Speaker 3: like my financial advisors in my team do because we have,

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Speaker 3: you know, a big list of clients and I am

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Speaker 3: very on top of, you know, talking to my team

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Speaker 3: about making sure that we are al He's making sure

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Speaker 3: every single client is in the best possible position and

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Speaker 3: being really proactive about that. But if there is a

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Speaker 3: mortgage broker who you know, is just looking for new

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Speaker 3: clients and wants to write new loans, it's very unlikely

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Speaker 3: that they might turn around and be like, oh hey, gee,

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Speaker 3: long time no speak, do you want to REFI? Because

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Speaker 3: you might go no, I'm happy thanks to some of

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Speaker 3: them don't do it. It just depends what their priorities

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Speaker 3: are because at the end of the day, like being

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Speaker 3: really brutally honest, a brand new loan is going to

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Speaker 3: be worth more money to a mortgage broker than a refinance.

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Speaker 3: But from my perspective, it's about looking after the friends

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Speaker 3: and family you already have.

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Speaker 2: Yeah, okay, gotcha cool.

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Speaker 3: That felt like a sales pitch, Fizella. It didn't mean

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Speaker 3: it to be.

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Speaker 2: Never mind me. You just see people doing good things,

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Speaker 2: as you would.

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Speaker 3: Say, try try.

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Speaker 2: So how often do people typically refinance over the life

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Speaker 2: of their loan?

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Speaker 3: Be as many times as you want. It's not a

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Speaker 3: bad idea to every couple of years have a look

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Speaker 3: at your mortgage and see what's working for you. But

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Speaker 3: in terms of how often people do it, it really

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Speaker 3: depends on the individual. So it really really is important

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Speaker 3: to make sure that you understand your mortgage as well.

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Speaker 3: So for me, using me as an example, I'm self employed.

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Speaker 3: Like you guys know, I run cheese on the money

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Speaker 3: and my income is very different to a salary and

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Speaker 3: wager employee. So I don't want to refinance all that

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Speaker 3: often because if I do, it's such an admin nightmare. George,

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Speaker 3: I have to like go through all my business and

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Speaker 3: my business profit if it is even making profit, and

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Speaker 3: have all of that questioned and reviewed. Whereas my partner

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Speaker 3: who has a salary and way journing job, he just

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Speaker 3: has to provide like three months worth of bank statements

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Speaker 3: and pay slips and make sure that they're all good

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Speaker 3: to go. So it can be a different experience for

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Speaker 3: everybody involved. But typically every couple of years, I would

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Speaker 3: absolutely recommend looking at it. But that's another warning or

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Speaker 3: little red flag. If you're going to refinance every few years, George,

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Speaker 3: you need to make sure that the term is the same.

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Speaker 3: So what I mean by that is, let's say tomorrow, George,

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Speaker 3: you get a mortgage for eight hundred thousand dollars and

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Speaker 3: you go, yay, I have my first thirty year mortgage.

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Speaker 3: And in two years time, you go, I should refinance

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Speaker 3: a two years ago to the day, listen to a

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Speaker 3: She's on the Money podcast and they said, I should

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Speaker 3: review this. Going to do just that. So you go

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Speaker 3: ahead and you go, hey, mortgage broker, can you get

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Speaker 3: me a new deal? And they go, yep, interest rates

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Speaker 3: doing really well, Gee, I can get you a better deal,

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Speaker 3: no problems. What I want you to be aware of

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Speaker 3: is not signing another thirty year mortgage because you've just

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Speaker 3: served two years in a mortgage. George, right, So you

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Speaker 3: want to be asking your mortgage broker to make sure

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Speaker 3: that your mortgage term is only twenty eight years, because

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Speaker 3: otherwise you'll be resetting that mortgage term to another thirty years,

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Speaker 3: thus pushing out your mortgage for another two years. So

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Speaker 3: even though you might be paying less interest, or you

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Speaker 3: might have less monthly repayments to make, and you go, wow,

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Speaker 3: this is really nice, you might be shooting yourself in

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Speaker 3: the foot by resetting that mortgage term to thirty years

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Speaker 3: when in reality you want your home paid off in

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Speaker 3: twenty eight because you're already served two Does that make sense?

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Speaker 2: It makes sense. Is that something that the mortgage broker

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Speaker 2: would flag with you or is that kind of your

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Speaker 2: responsibility to make sure that that's what happens.

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Speaker 3: I would say it's both okay, But given I don't

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Speaker 3: know the mortgage broker you guys can talk to, I

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Speaker 3: would say, definitely flag it, just to be sure, and

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Speaker 3: any good mortgage broker would be like g of course,

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Speaker 3: And if your mortgage broker didn't pick that up, at

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Speaker 3: least you.

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Speaker 2: Did, okay, And presumably there's no limit on the number

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Speaker 2: of times that you can refinance.

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Speaker 3: No, absolutely not. The only thing I would say is

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Speaker 3: really important is the refinancing costs. So you know, I

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Speaker 3: was talking before about clawbacks and understanding whether there's going

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Speaker 3: to be any money that's taken back off the mortgage

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Speaker 3: broker or if you've got like an advance. So you

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Speaker 3: know how some mortgages recently are like you'll get four

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Speaker 3: thousand dollars in XYZ if you sign up to our

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00:20:37,760 --> 00:20:40,960
Speaker 3: mortgage that will and a guarantee it have some kind

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Speaker 3: of clawback in it that if you refinance before twelve

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Speaker 3: months or before twenty four months or something, you have

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Speaker 3: to pay that back. And that's okay. You just need

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Speaker 3: to be aware of that, but no, there's no limit

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Speaker 3: on it. You do need to make sure that you're

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Speaker 3: still going to meet the credit requirements of the lender

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Speaker 3: that you're going to work with, so making sure that's

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Speaker 3: all good and your credit history is good is important.

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Speaker 3: But no, there is no limit on that. And that's

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Speaker 3: why I always say, just be on top of it,

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Speaker 3: Like if there's a better interest rate, i'd be asking

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Speaker 3: for it. And you know, again, off topic, but I

434
00:21:10,160 --> 00:21:12,800
Speaker 3: feel like I do this a lot before you consider

435
00:21:12,840 --> 00:21:15,439
Speaker 3: refinancing completely, because it is a lot of admin for

436
00:21:15,480 --> 00:21:18,439
Speaker 3: everybody involved. Have a look at what's out there, and

437
00:21:18,480 --> 00:21:20,360
Speaker 3: if you see an interest rate that you're like, Wow,

438
00:21:20,400 --> 00:21:22,960
Speaker 3: I'm not paying that, I wish I was Cally Bank.

439
00:21:23,160 --> 00:21:26,200
Speaker 3: You're excuse me, Ah, new bank over there is doing

440
00:21:26,200 --> 00:21:28,560
Speaker 3: a very nice interest rate. Could you match it? And

441
00:21:28,600 --> 00:21:31,320
Speaker 3: they might say yes, no problems, George, are I will

442
00:21:31,320 --> 00:21:33,639
Speaker 3: match it because I don't want you to as a

443
00:21:33,680 --> 00:21:36,159
Speaker 3: client leave me. Or they might go oh gee, we

444
00:21:36,240 --> 00:21:38,200
Speaker 3: can't match that, and then you'll scurry after your bank

445
00:21:38,200 --> 00:21:39,960
Speaker 3: and be like, hello, kin, Sarah, it is worth me

446
00:21:40,040 --> 00:21:43,080
Speaker 3: going through this admin nightmare to apply for a mortgage

447
00:21:43,119 --> 00:21:45,960
Speaker 3: because my current bank will not give me what you have.

448
00:21:46,440 --> 00:21:49,720
Speaker 2: Okay, that makes sense. It makes sense, It makes a story.

449
00:21:49,720 --> 00:21:51,240
Speaker 3: Adds up all checks out.

450
00:21:51,280 --> 00:21:54,000
Speaker 2: You touched on credit for a second there, v which

451
00:21:54,080 --> 00:21:56,800
Speaker 2: leads me to credits scores. How important are they when

452
00:21:56,840 --> 00:21:58,560
Speaker 2: it comes to refinancing.

453
00:21:58,160 --> 00:22:01,400
Speaker 3: Very George, because your credit's score is going to be

454
00:22:01,640 --> 00:22:04,919
Speaker 3: an indicator of what type of credit you have access to.

455
00:22:05,400 --> 00:22:08,240
Speaker 3: So if you want the lowest of low interest rates

456
00:22:08,280 --> 00:22:11,800
Speaker 3: and the best possible deal, they are only made by

457
00:22:11,840 --> 00:22:15,360
Speaker 3: people who offer credit to people who have really ridiculously

458
00:22:15,440 --> 00:22:18,240
Speaker 3: good credit scores. So it's important to understand that the

459
00:22:18,280 --> 00:22:21,120
Speaker 3: stronger your credit score, the more reliable you essentially are

460
00:22:21,160 --> 00:22:23,760
Speaker 3: to lend to, so banks will look pretty favorably onto

461
00:22:23,840 --> 00:22:27,720
Speaker 3: you as a borrower. And then conversely, if you've incurred

462
00:22:27,720 --> 00:22:30,520
Speaker 3: maybe some bad debt after getting your mortgage, like you

463
00:22:30,600 --> 00:22:32,239
Speaker 3: got your mortgage off a few years ago, and then

464
00:22:32,240 --> 00:22:34,920
Speaker 3: you've gotten some personal loans and maybe you've defaulted on

465
00:22:34,920 --> 00:22:37,840
Speaker 3: one of the payments, you might not actually be able

466
00:22:37,880 --> 00:22:40,480
Speaker 3: to refinance. So it's important to realize it. Just because

467
00:22:40,480 --> 00:22:42,760
Speaker 3: you've got the mortgage in the first place doesn't mean

468
00:22:42,800 --> 00:22:45,080
Speaker 3: another lender is going to scoop you up and say, yep,

469
00:22:45,160 --> 00:22:47,119
Speaker 3: no problems. We'd love for you to be our client.

470
00:22:47,600 --> 00:22:50,720
Speaker 2: Okay, you can't see that. I feel like credit scores

471
00:22:50,720 --> 00:22:53,600
Speaker 2: are much more important than we give them credit for.

472
00:22:54,440 --> 00:22:58,240
Speaker 3: Oh she's funny, she's a funny goal. Thank you, she's

473
00:22:58,280 --> 00:22:59,080
Speaker 3: on the comedy.

474
00:23:00,520 --> 00:23:02,840
Speaker 2: I have three quick questions for you before we head

475
00:23:02,840 --> 00:23:05,600
Speaker 2: to the break. I am away got some brains.

476
00:23:05,680 --> 00:23:06,520
Speaker 3: That's your job.

477
00:23:06,680 --> 00:23:09,720
Speaker 2: That is true? If we're switching from a variable loan

478
00:23:09,800 --> 00:23:12,960
Speaker 2: V to a fixed rate loan, is it true that

479
00:23:12,960 --> 00:23:15,399
Speaker 2: there's a limit on the extra repayments that we can

480
00:23:15,440 --> 00:23:17,720
Speaker 2: be making. Because I read that this was the thing,

481
00:23:17,800 --> 00:23:18,680
Speaker 2: But is it true?

482
00:23:18,760 --> 00:23:19,080
Speaker 3: Love this?

483
00:23:19,400 --> 00:23:19,959
Speaker 2: Yes and no?

484
00:23:20,280 --> 00:23:23,119
Speaker 3: So yes and also no, it depends on your lender

485
00:23:23,320 --> 00:23:26,800
Speaker 3: and what the rules they've put in place are. Yes,

486
00:23:26,960 --> 00:23:30,919
Speaker 3: So what you've read is arguably going to be very true.

487
00:23:31,280 --> 00:23:33,439
Speaker 3: So ge, when you have a variable rate loan, you

488
00:23:33,440 --> 00:23:35,879
Speaker 3: can make as many additional repayments as you want to

489
00:23:35,920 --> 00:23:38,960
Speaker 3: depending on the loan, without being penalized for it. And

490
00:23:39,000 --> 00:23:42,199
Speaker 3: that's because you're seeing the ups and down of the

491
00:23:42,240 --> 00:23:43,840
Speaker 3: market in the same way that you would in the

492
00:23:43,880 --> 00:23:46,200
Speaker 3: share market in a way. So it might be two

493
00:23:46,200 --> 00:23:48,720
Speaker 3: point five percent, but then your variable interest rate might

494
00:23:48,760 --> 00:23:50,560
Speaker 3: go up and they go, oh cool, like you're interest

495
00:23:50,640 --> 00:23:53,280
Speaker 3: rate on your mortgage now three percent. But a lot

496
00:23:53,320 --> 00:23:55,800
Speaker 3: of people who are in a position where they're like, no, v,

497
00:23:55,960 --> 00:23:58,760
Speaker 3: I really want to fixed rate loan. The reason you

498
00:23:58,800 --> 00:24:02,919
Speaker 3: would do that is to lock in consistent payments. So

499
00:24:03,080 --> 00:24:05,240
Speaker 3: instead of going, oh, well, gee, I know the interest

500
00:24:05,320 --> 00:24:07,560
Speaker 3: rate could go down, but like, even if it goes down,

501
00:24:07,640 --> 00:24:10,280
Speaker 3: it's not worth the benefit of it going up and

502
00:24:10,320 --> 00:24:12,640
Speaker 3: me not being able to pay the mortgage. So if

503
00:24:12,640 --> 00:24:15,240
Speaker 3: you have a fixed rate loan, it is very likely

504
00:24:15,320 --> 00:24:17,000
Speaker 3: that you might only be able to pay up to

505
00:24:17,040 --> 00:24:19,320
Speaker 3: a certain amount in mortgage orpayments, and that could be

506
00:24:19,359 --> 00:24:21,639
Speaker 3: like ten thousand dollars a year, it could be thirty

507
00:24:21,680 --> 00:24:24,080
Speaker 3: thousand dollars a year, or thirty thousand dollars over a

508
00:24:24,119 --> 00:24:27,760
Speaker 3: certain period of time that they've stipulated, and if you

509
00:24:27,840 --> 00:24:31,360
Speaker 3: do actually pay it off more than what they have outlined,

510
00:24:31,640 --> 00:24:33,800
Speaker 3: you might end up with a penalty fee, which feels

511
00:24:33,880 --> 00:24:36,800
Speaker 3: like they're shooting you in the foot, but is something

512
00:24:36,800 --> 00:24:40,000
Speaker 3: to be really aware of because a lot of these

513
00:24:40,119 --> 00:24:44,520
Speaker 3: really no frills kind of mortgage companies, they'll be like,

514
00:24:44,640 --> 00:24:47,359
Speaker 3: oh my gosh, our interest rate's the lowest on the market,

515
00:24:47,400 --> 00:24:49,840
Speaker 3: and you go, oh my gosh, gee, that's so good.

516
00:24:49,960 --> 00:24:52,800
Speaker 3: I'm gonna skip the broker. I'm going to skip straight

517
00:24:52,840 --> 00:24:54,439
Speaker 3: down the street and I am going to get a

518
00:24:54,480 --> 00:24:57,800
Speaker 3: loan from them. But you might very quickly find out

519
00:24:57,920 --> 00:25:00,280
Speaker 3: that that no frills loan means you don't get an

520
00:25:00,280 --> 00:25:02,560
Speaker 3: offset account, which I'm sure we'll talk about at some point,

521
00:25:02,880 --> 00:25:05,960
Speaker 3: and you actually don't have the ability to make additional repayments.

522
00:25:06,000 --> 00:25:08,239
Speaker 3: So even the interest rate is really low, it's not

523
00:25:08,280 --> 00:25:11,800
Speaker 3: of benefit because you're stuck in the loan for definitely

524
00:25:11,800 --> 00:25:14,000
Speaker 3: the thirty year period and you don't have the ability

525
00:25:14,119 --> 00:25:16,640
Speaker 3: to pay it out early. So does that make sense?

526
00:25:16,680 --> 00:25:19,879
Speaker 3: I hope it makes sense. It making sense today you are.

527
00:25:19,840 --> 00:25:23,960
Speaker 2: You're speaking clearly and concisely. Well done, you, thank you,

528
00:25:24,040 --> 00:25:24,440
Speaker 2: thank you.

529
00:25:24,520 --> 00:25:25,280
Speaker 3: I'm here all day.

530
00:25:25,440 --> 00:25:28,000
Speaker 2: So now I'm assuming would be a good time to

531
00:25:28,040 --> 00:25:30,600
Speaker 2: be refinancing because the interest rates are low.

532
00:25:30,920 --> 00:25:32,440
Speaker 3: If you haven't done it in a couple of years,

533
00:25:32,480 --> 00:25:35,760
Speaker 3: it is always worth revisiting. And I guess I'm biased

534
00:25:35,840 --> 00:25:39,120
Speaker 3: because I do believe deeply in mortgage brokers that are

535
00:25:39,200 --> 00:25:42,800
Speaker 3: not bank aligned. So that sounds bad because I have

536
00:25:42,840 --> 00:25:44,880
Speaker 3: a lot of friends who work as mortgage brokers at

537
00:25:44,920 --> 00:25:48,399
Speaker 3: particular financial institutions, like they might be like common Wealth

538
00:25:48,480 --> 00:25:50,360
Speaker 3: or NAB, or they might be a west Pack or

539
00:25:50,440 --> 00:25:53,320
Speaker 3: you know, any of the Big four. But the reason

540
00:25:53,320 --> 00:25:55,760
Speaker 3: I would say go to an independent mortgage broke is

541
00:25:55,760 --> 00:25:58,040
Speaker 3: because they can look at every single mortgage product on

542
00:25:58,080 --> 00:26:00,399
Speaker 3: the market and also like the credit you unions and

543
00:26:00,440 --> 00:26:02,800
Speaker 3: stuff and get you the best possible deal for your

544
00:26:02,840 --> 00:26:06,760
Speaker 3: situation instead of just skipping down to Commonwealth, which Commonwealth

545
00:26:06,760 --> 00:26:10,200
Speaker 3: mortgages might suit you perfectly. G but if you walk

546
00:26:10,240 --> 00:26:12,080
Speaker 3: in their doors. All they're going to be able to

547
00:26:12,119 --> 00:26:15,040
Speaker 3: offer you is the Commonwealth mortgage, like they're not able

548
00:26:15,119 --> 00:26:17,760
Speaker 3: to actually go Hey, g so the Bendigo bank one

549
00:26:17,840 --> 00:26:20,639
Speaker 3: is actually better for you in this particular situation. Or

550
00:26:21,000 --> 00:26:23,320
Speaker 3: you know, you might want an offset account or a

551
00:26:23,359 --> 00:26:28,240
Speaker 3: redraw facility or something that helps you financially and Commonwealth

552
00:26:28,240 --> 00:26:29,879
Speaker 3: will be like, yeah, nah, we just don't do that.

553
00:26:30,520 --> 00:26:32,960
Speaker 3: This is our mortgage. We've got two options. So I

554
00:26:33,200 --> 00:26:37,120
Speaker 3: just see such value in people going to mortgage brokers

555
00:26:37,320 --> 00:26:40,359
Speaker 3: because it doesn't cost you anymore but will save you

556
00:26:40,400 --> 00:26:41,840
Speaker 3: a lot over the long period.

557
00:26:42,280 --> 00:26:42,520
Speaker 2: Yeah.

558
00:26:42,600 --> 00:26:44,240
Speaker 3: I don't know very heated about that.

559
00:26:44,400 --> 00:26:46,440
Speaker 2: No, well, it just it just makes sense, guys.

560
00:26:46,480 --> 00:26:47,200
Speaker 3: It just makes sense.

561
00:26:47,280 --> 00:26:50,560
Speaker 2: Makes the sense. So vhe when can we expect those

562
00:26:50,640 --> 00:26:53,560
Speaker 2: interest rates to go up? I know you can't see

563
00:26:53,560 --> 00:26:56,119
Speaker 2: into the future, but do you have any indication of

564
00:26:56,600 --> 00:26:59,159
Speaker 2: when things will be spicing back up a little bit? Oh?

565
00:26:59,280 --> 00:27:02,879
Speaker 3: When did the restates become spassy? I think it's going

566
00:27:02,960 --> 00:27:05,719
Speaker 3: to be a little while. And the reason that I

567
00:27:05,800 --> 00:27:08,440
Speaker 3: say that is, I mean the economists at the moment

568
00:27:08,520 --> 00:27:10,920
Speaker 3: are predicting that interest rates are going to surge soon,

569
00:27:11,400 --> 00:27:15,240
Speaker 3: but the Reserve Bank of Australia has actually forecast that

570
00:27:15,320 --> 00:27:17,959
Speaker 3: it might be some way off, and I would trust

571
00:27:18,040 --> 00:27:22,200
Speaker 3: them over the economists in this particular circumstance, just because

572
00:27:22,200 --> 00:27:25,040
Speaker 3: of what we've gone through with COVID. And I say

573
00:27:25,080 --> 00:27:28,240
Speaker 3: that because can you imagine if we as Australia as

574
00:27:28,240 --> 00:27:30,560
Speaker 3: a country, as a community have gone through what we've

575
00:27:30,560 --> 00:27:32,879
Speaker 3: gone through over the last two years, and then all

576
00:27:32,920 --> 00:27:35,359
Speaker 3: the banks like by the way your mortgage repayments are

577
00:27:35,400 --> 00:27:37,679
Speaker 3: more like, that is not going to be good for

578
00:27:37,680 --> 00:27:39,960
Speaker 3: property prices. It is not going to be good for

579
00:27:40,000 --> 00:27:42,800
Speaker 3: the economy in general. Everybody is going to stop spending

580
00:27:42,840 --> 00:27:45,320
Speaker 3: because they're spending more on their mortgages and be a

581
00:27:45,320 --> 00:27:47,840
Speaker 3: little bit more frugal, and it's not actually going to

582
00:27:47,960 --> 00:27:50,760
Speaker 3: help economic growth in any way, shape or form. So

583
00:27:50,840 --> 00:27:53,240
Speaker 3: from my perspective, I don't think that they will go

584
00:27:53,400 --> 00:27:56,560
Speaker 3: up significantly. I mean I think that they might go

585
00:27:56,720 --> 00:27:58,800
Speaker 3: up in terms of you know how at the moment

586
00:27:58,840 --> 00:28:00,840
Speaker 3: you can get like two point five five percent fixed

587
00:28:00,920 --> 00:28:03,760
Speaker 3: rate mortgages, I think that that might go up. But

588
00:28:03,840 --> 00:28:05,760
Speaker 3: if you already have one, you're not going to be

589
00:28:05,760 --> 00:28:09,240
Speaker 3: stung with like a three percent sharp increase because of inflation.

590
00:28:09,600 --> 00:28:12,720
Speaker 3: Does that make sense? So? I think that we're relatively okay,

591
00:28:13,400 --> 00:28:15,800
Speaker 3: So when it comes to rising interest rates, I think

592
00:28:15,840 --> 00:28:18,280
Speaker 3: it's important to keep an eye on what's going on,

593
00:28:18,359 --> 00:28:19,919
Speaker 3: because I mean, at the moment, I think you can

594
00:28:19,960 --> 00:28:22,120
Speaker 3: go and get a variable rate of one point nine

595
00:28:22,200 --> 00:28:24,879
Speaker 3: nine percent perannum at like eighty six four hundred and

596
00:28:24,960 --> 00:28:27,640
Speaker 3: our friends at you bank, and it's one of those

597
00:28:27,640 --> 00:28:31,520
Speaker 3: things that I don't think that your personal variable interest

598
00:28:31,560 --> 00:28:33,639
Speaker 3: rate on a mortgage is going to change, but I

599
00:28:33,720 --> 00:28:36,520
Speaker 3: do think that that might increase over time over the

600
00:28:36,600 --> 00:28:38,560
Speaker 3: next six months. I think that we won't see one

601
00:28:38,600 --> 00:28:40,840
Speaker 3: point nine to nine percent because we can't afford it

602
00:28:40,920 --> 00:28:43,200
Speaker 3: or banks can't afford it. But I don't think we'll

603
00:28:43,200 --> 00:28:46,800
Speaker 3: be shooting ourselves in the foot by increasing actual consumers loans.

604
00:28:46,840 --> 00:28:49,840
Speaker 3: But that's personal opinion. And at the end of the day,

605
00:28:49,960 --> 00:28:52,120
Speaker 3: when you went and got a mortgage, you would have

606
00:28:52,120 --> 00:28:54,680
Speaker 3: been assessed at a higher interest rate to make sure

607
00:28:54,720 --> 00:28:57,280
Speaker 3: that you could service that. So I don't think too

608
00:28:57,320 --> 00:29:00,080
Speaker 3: many people will be in a worse off position. But

609
00:29:00,120 --> 00:29:02,640
Speaker 3: when it comes to the RBA and the government, I

610
00:29:02,840 --> 00:29:06,520
Speaker 3: genuinely believe they're going to make sure that everybody's relatively okay.

611
00:29:06,680 --> 00:29:08,200
Speaker 3: We've had a pretty Rocky Ride.

612
00:29:08,400 --> 00:29:10,560
Speaker 2: All right, cool, Well, I think we'll leave it there

613
00:29:10,640 --> 00:29:12,680
Speaker 2: for now, V, but we will be back after a

614
00:29:12,800 --> 00:29:16,480
Speaker 2: very short break to discuss how to actually refinance mortgage,

615
00:29:16,520 --> 00:29:18,360
Speaker 2: like the nuts and belts, how do we actually do it?

616
00:29:18,760 --> 00:29:22,760
Speaker 2: And we will also be flagging the common mistakes vickidc's

617
00:29:22,840 --> 00:29:25,760
Speaker 2: when it comes to refinancing, So please don't go anywhere,

618
00:29:26,600 --> 00:29:30,080
Speaker 2: alrighty V. Straight back into it, my girl, How do

619
00:29:30,160 --> 00:29:32,880
Speaker 2: we actually refinance our mortgaging?

620
00:29:33,640 --> 00:29:37,360
Speaker 3: Well, I mean, like pragmatically speaking, to refinance mortgage, you're

621
00:29:37,360 --> 00:29:40,360
Speaker 3: going to need to firstly have a mortgage to start with,

622
00:29:41,080 --> 00:29:43,719
Speaker 3: so that's usually a great place to start. Check your

623
00:29:43,720 --> 00:29:45,920
Speaker 3: bank accounts, check your financial sitch.

624
00:29:45,960 --> 00:29:46,560
Speaker 2: If you've got a.

625
00:29:46,520 --> 00:29:50,200
Speaker 3: Mortgage, you, my friend, could be up for the exciting

626
00:29:50,240 --> 00:29:54,240
Speaker 3: process of refinancing. After that, I would actually sit back

627
00:29:54,280 --> 00:29:56,960
Speaker 3: and go, what are your goals? Why are you refinancing?

628
00:29:56,960 --> 00:29:59,200
Speaker 3: You doing it because you just heard this podcast episode

629
00:29:59,240 --> 00:30:01,800
Speaker 3: and you're like, what a good idea? Or are we

630
00:30:01,840 --> 00:30:05,000
Speaker 3: actually refinancing with the intention to save money? Is it

631
00:30:05,040 --> 00:30:08,280
Speaker 3: to funder renovation or is it to purchase an investment

632
00:30:08,280 --> 00:30:11,040
Speaker 3: property or a new home? Like, what's the plan? It's

633
00:30:11,120 --> 00:30:13,680
Speaker 3: super helpful to have a reason here because often if

634
00:30:13,680 --> 00:30:15,840
Speaker 3: you're going to sit down with a broker or you're

635
00:30:15,880 --> 00:30:18,000
Speaker 3: going to do it, like what are you even looking for?

636
00:30:18,200 --> 00:30:20,760
Speaker 3: Because you might go, all right, well, their interest rates better,

637
00:30:21,280 --> 00:30:23,800
Speaker 3: but you might also have a whole heap of savings

638
00:30:23,840 --> 00:30:26,040
Speaker 3: that you want in an offset, but that new interest

639
00:30:26,120 --> 00:30:28,520
Speaker 3: rate with a different bank might not actually offer an

640
00:30:28,520 --> 00:30:31,720
Speaker 3: offset facility. So I do recommend and I know that

641
00:30:31,840 --> 00:30:34,200
Speaker 3: not everybody is going to agree with me here, but

642
00:30:34,280 --> 00:30:37,920
Speaker 3: I do recommend fully wholeheartedly going and talking to a

643
00:30:37,960 --> 00:30:40,360
Speaker 3: broker because they are going to be able to make

644
00:30:40,440 --> 00:30:43,360
Speaker 3: sure that everything you want to achieve happens if it

645
00:30:43,440 --> 00:30:46,280
Speaker 3: is actually possible, and you still get all the benefits

646
00:30:46,320 --> 00:30:48,560
Speaker 3: from your original mortgage, Like you might not even know

647
00:30:49,040 --> 00:30:51,480
Speaker 3: that you have some kind of benefit with a mortgage

648
00:30:51,680 --> 00:30:53,840
Speaker 3: and you might lose it, if that makes sense. So

649
00:30:53,880 --> 00:30:56,000
Speaker 3: I think it's really important to just know your stuff,

650
00:30:56,040 --> 00:30:58,520
Speaker 3: but also more importantly, no your goal, Like why are

651
00:30:58,520 --> 00:31:00,160
Speaker 3: we doing this? Is this just because you listen to

652
00:31:00,160 --> 00:31:01,240
Speaker 3: the episode OOOFED?

653
00:31:01,280 --> 00:31:01,920
Speaker 2: If it's true?

654
00:31:02,000 --> 00:31:05,840
Speaker 3: George, look at us, we are little influencess. I believe

655
00:31:05,880 --> 00:31:09,840
Speaker 3: they call them influencers now because we're financial influences. Well,

656
00:31:09,880 --> 00:31:12,840
Speaker 3: I mean you are whole babe, you here too, You

657
00:31:12,960 --> 00:31:15,320
Speaker 3: here every week Like if you think you are immune

658
00:31:15,360 --> 00:31:18,160
Speaker 3: to this, you are wrong. It's you as well.

659
00:31:19,440 --> 00:31:21,960
Speaker 2: Well that was the weirdest laugh ever. Sorry, continue, No,

660
00:31:22,120 --> 00:31:22,560
Speaker 2: we love that.

661
00:31:22,720 --> 00:31:26,720
Speaker 3: Keep that party Insand the next bit is do research.

662
00:31:26,960 --> 00:31:29,520
Speaker 3: So make sure that you are scouting around for the

663
00:31:29,520 --> 00:31:32,520
Speaker 3: best deals and the best options and the best rates

664
00:31:32,560 --> 00:31:36,880
Speaker 3: and the best value around. So obviously I'd recommend chatting

665
00:31:36,880 --> 00:31:38,560
Speaker 3: with a mortgage broke up, but you can also use

666
00:31:38,600 --> 00:31:42,360
Speaker 3: comparison websites. But do keep in mind that comparison websites

667
00:31:42,440 --> 00:31:46,200
Speaker 3: often earn commission from ranking certain lenders higher than others.

668
00:31:46,800 --> 00:31:49,920
Speaker 3: I have you know a little bit of insider information

669
00:31:49,960 --> 00:31:53,200
Speaker 3: that that happens quite often, and that different lenders pay

670
00:31:53,320 --> 00:31:56,320
Speaker 3: to come up at different rankings on those comparison websites.

671
00:31:56,440 --> 00:31:59,640
Speaker 3: So please don't take them as gospel. Make sure that

672
00:31:59,640 --> 00:32:02,360
Speaker 3: you are making the right decision for you, not the

673
00:32:02,440 --> 00:32:04,840
Speaker 3: right decision because there was a sponsored ad at the

674
00:32:04,840 --> 00:32:08,400
Speaker 3: top of the page. And remember that mortgage brokers won't

675
00:32:08,480 --> 00:32:10,840
Speaker 3: charge you as they make money from the lender that

676
00:32:10,960 --> 00:32:14,640
Speaker 3: you are referred to, not a more expensive rate for you.

677
00:32:14,840 --> 00:32:17,400
Speaker 3: I think people just assume that the cost is absorbed

678
00:32:17,440 --> 00:32:20,040
Speaker 3: into the mortgage. It's not. It's not how it works.

679
00:32:20,400 --> 00:32:23,280
Speaker 3: If you see a rate on the website and you

680
00:32:23,320 --> 00:32:25,640
Speaker 3: go direct, it will be exactly the same as what

681
00:32:25,680 --> 00:32:28,080
Speaker 3: the rate you get with your mortgage broker is, I promise.

682
00:32:28,320 --> 00:32:32,920
Speaker 2: Okay, So the mortgage brokers are essentially free. We love

683
00:32:33,040 --> 00:32:36,640
Speaker 2: that we are encouraging people to have conversations and engage

684
00:32:36,680 --> 00:32:41,160
Speaker 2: with the brokers. But there are still some fees associated

685
00:32:41,160 --> 00:32:43,240
Speaker 2: when it comes to refinancing, right.

686
00:32:43,160 --> 00:32:45,800
Speaker 3: Yes, yes they are, and quickly before I tell you

687
00:32:45,840 --> 00:32:48,320
Speaker 3: what those are, I think it's really important for me

688
00:32:48,560 --> 00:32:52,520
Speaker 3: to I guess outline that some mortgage brokers actually will

689
00:32:52,600 --> 00:32:55,200
Speaker 3: charge you a fee. And the reason they're charging your

690
00:32:55,280 --> 00:33:01,080
Speaker 3: fee is because after the Royal Commission, compliance increased significantly.

691
00:33:01,520 --> 00:33:04,320
Speaker 3: Like I mean, we are doing triple the amount of

692
00:33:04,360 --> 00:33:07,640
Speaker 3: work that we were before for work that might not

693
00:33:07,760 --> 00:33:11,000
Speaker 3: go through because lending has gotten even harder after the

694
00:33:11,080 --> 00:33:15,640
Speaker 3: Royal Commission. So it is not uncommon practice nowadays for

695
00:33:15,680 --> 00:33:17,520
Speaker 3: you to go to a mortgage broker and say, hey,

696
00:33:17,560 --> 00:33:20,440
Speaker 3: mortgage broker, it's my first loan. I'd like to get

697
00:33:20,480 --> 00:33:23,520
Speaker 3: pre approval, and they go, yeah, no problems. Pre approvals

698
00:33:23,520 --> 00:33:26,520
Speaker 3: four hundred and fifty dollars and you might scoff at

699
00:33:26,520 --> 00:33:28,400
Speaker 3: that and be like, what the hell, Like I thought

700
00:33:28,440 --> 00:33:31,080
Speaker 3: this was going to be free. But what you have

701
00:33:31,160 --> 00:33:33,760
Speaker 3: to understand in this day and age, especially in twenty

702
00:33:33,800 --> 00:33:37,000
Speaker 3: twenty two, is that so many people get mortgage pre

703
00:33:37,040 --> 00:33:40,480
Speaker 3: approval and then let it laps because mortgage pre approval

704
00:33:40,720 --> 00:33:44,360
Speaker 3: usually only lasts for ninety days, so for three months,

705
00:33:44,720 --> 00:33:46,920
Speaker 3: and you might not find a home in that period

706
00:33:47,000 --> 00:33:49,440
Speaker 3: of time. So this mortgage broker has done a whole

707
00:33:49,520 --> 00:33:52,520
Speaker 3: heap of work for you and has had no payment

708
00:33:52,520 --> 00:33:55,840
Speaker 3: because they only get paid once that loan settles, so

709
00:33:55,840 --> 00:33:58,000
Speaker 3: they've done that, and then after that ninety days they

710
00:33:58,080 --> 00:34:00,520
Speaker 3: might have to go back through the same proces again,

711
00:34:00,720 --> 00:34:05,360
Speaker 3: which is fine. Most mortgage brokers are absolutely okay, but George,

712
00:34:05,400 --> 00:34:07,800
Speaker 3: as you know, property market's pretty hot. It might take

713
00:34:07,840 --> 00:34:10,520
Speaker 3: you twelve months to buy, so they're doing all these

714
00:34:10,560 --> 00:34:13,120
Speaker 3: pre approvals and all this work that they aren't getting

715
00:34:13,120 --> 00:34:16,880
Speaker 3: paid for. So it's very common nowadays for a mortgage

716
00:34:16,880 --> 00:34:20,960
Speaker 3: broker to go, hey, gee, get it, but pre approval

717
00:34:21,040 --> 00:34:23,880
Speaker 3: is actually four hundred and fifty dollars, And you might go, ah,

718
00:34:23,920 --> 00:34:25,640
Speaker 3: I was just getting pre approval because I wanted to

719
00:34:25,680 --> 00:34:28,360
Speaker 3: see what I could buy wasn't too serious, so it

720
00:34:28,440 --> 00:34:31,080
Speaker 3: kind of scares away the people that aren't super serious.

721
00:34:31,360 --> 00:34:34,240
Speaker 3: But then if you do pre approval with a particular broker,

722
00:34:34,719 --> 00:34:36,640
Speaker 3: they're just going to renew that for you whenever you

723
00:34:36,680 --> 00:34:38,040
Speaker 3: need it. So you're not going to pay that four

724
00:34:38,080 --> 00:34:40,680
Speaker 3: hundred and fifty dollars every three months, if that makes sense,

725
00:34:40,719 --> 00:34:43,160
Speaker 3: because you know you've shown that you're serious about it.

726
00:34:43,400 --> 00:34:45,799
Speaker 3: So I don't think that in the grand scheme of

727
00:34:45,800 --> 00:34:47,680
Speaker 3: property and how much property is going to cost you,

728
00:34:47,760 --> 00:34:50,000
Speaker 3: that's a fee that we should be worried about. But

729
00:34:50,600 --> 00:34:52,120
Speaker 3: I just want to put it on the table because

730
00:34:52,120 --> 00:34:54,680
Speaker 3: I know I've had a few messages recently from people going,

731
00:34:54,880 --> 00:34:56,719
Speaker 3: oh my god, they tried to charge me and they

732
00:34:56,719 --> 00:34:58,719
Speaker 3: were then to be free. It's like, oh no, I

733
00:34:58,800 --> 00:35:01,359
Speaker 3: totally get why they might. And you know what, if

734
00:35:01,400 --> 00:35:04,080
Speaker 3: your broker is charging you, it's very likely that they

735
00:35:04,080 --> 00:35:06,000
Speaker 3: are a good broker and they're just making sure that

736
00:35:06,000 --> 00:35:07,560
Speaker 3: they're only working with good clients.

737
00:35:07,880 --> 00:35:08,240
Speaker 2: Stunning.

738
00:35:08,320 --> 00:35:11,520
Speaker 3: Thank you for coming to my broking, Ted Torr loved it.

739
00:35:11,640 --> 00:35:14,080
Speaker 3: I will get back on to the question you asked me,

740
00:35:14,239 --> 00:35:18,160
Speaker 3: which was what are the fees associated with refinancing? So

741
00:35:18,239 --> 00:35:20,480
Speaker 3: first things First, if you have a fixed rate mortgage,

742
00:35:20,520 --> 00:35:21,960
Speaker 3: there could be a fee for you getting out of

743
00:35:22,000 --> 00:35:23,480
Speaker 3: a fixed rate mortgage.

744
00:35:23,800 --> 00:35:24,560
Speaker 2: It's twofold.

745
00:35:25,000 --> 00:35:27,720
Speaker 3: You could be shooting yourself in the foot and you go, oh, well,

746
00:35:27,760 --> 00:35:29,239
Speaker 3: I know, I get a lot of interest rate, but

747
00:35:29,760 --> 00:35:32,120
Speaker 3: that's a really big sum of money. Or you could go,

748
00:35:32,719 --> 00:35:34,160
Speaker 3: that might be a big sum of money, but you

749
00:35:34,160 --> 00:35:36,680
Speaker 3: know what, I'm going to say more by changing my mortgage.

750
00:35:36,719 --> 00:35:38,759
Speaker 3: So do the maths work out what is going to

751
00:35:38,800 --> 00:35:41,919
Speaker 3: work best for you. Number two is there could also

752
00:35:41,960 --> 00:35:44,239
Speaker 3: be an application fee for your new loan, so be

753
00:35:44,280 --> 00:35:46,400
Speaker 3: aware of that and do a little bit of googling

754
00:35:46,440 --> 00:35:48,760
Speaker 3: around what that could mean, or just ask your broker.

755
00:35:49,360 --> 00:35:52,319
Speaker 3: And you might have to pay a switching fee if

756
00:35:52,320 --> 00:35:55,160
Speaker 3: you're switching loans but staying with your current lender, because

757
00:35:55,400 --> 00:35:57,560
Speaker 3: if banks don't make money, what do they do?

758
00:35:57,680 --> 00:35:58,120
Speaker 1: George.

759
00:35:59,640 --> 00:36:02,759
Speaker 3: And the fourth and most frustrating one is a termination

760
00:36:02,960 --> 00:36:05,560
Speaker 3: fee and that could pop up at some point if

761
00:36:05,560 --> 00:36:08,160
Speaker 3: you're terminating a mortgage before the end of your term.

762
00:36:08,440 --> 00:36:11,800
Speaker 3: So just be really careful with these costs because you

763
00:36:11,840 --> 00:36:13,799
Speaker 3: don't want to refinance to a new bank and go

764
00:36:13,880 --> 00:36:16,880
Speaker 3: through that entire process without having evaluated the loan. You

765
00:36:16,920 --> 00:36:20,640
Speaker 3: have because I guarantee George that new bank is not

766
00:36:20,719 --> 00:36:22,480
Speaker 3: going to be like, oh my gosh, have you considered

767
00:36:22,480 --> 00:36:25,839
Speaker 3: the termination fee on your other mortgage? They're just gonna

768
00:36:25,840 --> 00:36:28,759
Speaker 3: go heck, yes, George's moving banks. We're going to take her.

769
00:36:29,120 --> 00:36:30,839
Speaker 3: So you might have already signed off on a new

770
00:36:30,880 --> 00:36:34,400
Speaker 3: refinance and then get stung later after you've transferred the mortgage.

771
00:36:34,440 --> 00:36:37,080
Speaker 3: So just make sure you know what you're talking about

772
00:36:37,120 --> 00:36:39,160
Speaker 3: and you are doing your due diligence.

773
00:36:39,719 --> 00:36:43,560
Speaker 2: Okay, Well, speaking of due diligence, did I say that properly?

774
00:36:43,920 --> 00:36:45,040
Speaker 3: Yeah? Sounded about right?

775
00:36:45,280 --> 00:36:48,399
Speaker 2: Uh huh. What are the common mistakes that people are

776
00:36:48,440 --> 00:36:50,920
Speaker 2: making in the refinancing space fee?

777
00:36:51,200 --> 00:36:54,120
Speaker 3: There are a few, and you would be very excited

778
00:36:54,160 --> 00:36:56,399
Speaker 3: to know. I have pre listed a few of them.

779
00:36:56,480 --> 00:37:00,879
Speaker 3: Are you ready? Are you sitting down me? Are you excited? M? Yeah?

780
00:37:01,040 --> 00:37:01,320
Speaker 1: Girl?

781
00:37:01,560 --> 00:37:04,799
Speaker 3: Oh yeah, bring it alright. So, g The first one

782
00:37:04,880 --> 00:37:08,440
Speaker 3: out the gate is people underestimate, and this is super

783
00:37:08,440 --> 00:37:11,799
Speaker 3: common how much you can actually save by refinancing, because

784
00:37:11,800 --> 00:37:14,719
Speaker 3: you might go, ah, I don't need to refinance my

785
00:37:14,760 --> 00:37:17,200
Speaker 3: mortgage is like three percent, it's only two point five,

786
00:37:17,360 --> 00:37:21,960
Speaker 3: Like why bother? But you absolutely should be bothered because

787
00:37:22,160 --> 00:37:24,040
Speaker 3: we haven't said this quote on the podcast in a

788
00:37:24,080 --> 00:37:28,080
Speaker 3: really long time. But g from little things, big things grow.

789
00:37:28,800 --> 00:37:31,120
Speaker 3: And if you were thinking of refinancing your mortgage but

790
00:37:31,200 --> 00:37:33,319
Speaker 3: decided against it because the best rate you can find

791
00:37:33,400 --> 00:37:36,319
Speaker 3: is only like zero point five percent lower than your

792
00:37:36,320 --> 00:37:40,000
Speaker 3: current rate, I absolutely wouldn't be dismissing it because if

793
00:37:40,000 --> 00:37:42,480
Speaker 3: you start breaking it down, and we use an example

794
00:37:42,520 --> 00:37:44,160
Speaker 3: of you know how earlier in the episode we said

795
00:37:44,160 --> 00:37:46,680
Speaker 3: that you had five hundred thousand dollars equity. Let's use

796
00:37:46,680 --> 00:37:50,319
Speaker 3: a five hundred thousand dollar example. So let's say half

797
00:37:50,320 --> 00:37:53,759
Speaker 3: a percent on five hundred thousand dollars. You go, that's

798
00:37:53,800 --> 00:37:56,480
Speaker 3: not much, right, but it is because a five hundred

799
00:37:56,520 --> 00:37:59,520
Speaker 3: thousand dollar alone means that if you refinanced, you'd be

800
00:37:59,560 --> 00:38:02,399
Speaker 3: paying two twenty one hundred and eighty one dollars each

801
00:38:02,440 --> 00:38:06,040
Speaker 3: and every single month instead of twenty three hundred dollars.

802
00:38:06,440 --> 00:38:10,120
Speaker 3: And that doesn't sound massive, but over a period of

803
00:38:10,160 --> 00:38:14,160
Speaker 3: like five years, that's seven five hundred and sixty bucks.

804
00:38:14,239 --> 00:38:16,919
Speaker 3: And if you have that loan for twenty five years,

805
00:38:16,960 --> 00:38:19,959
Speaker 3: which most of you might because that's a standard term

806
00:38:20,040 --> 00:38:24,160
Speaker 3: for mortgages, that's thirty seven eight hundred grand, Like what,

807
00:38:24,680 --> 00:38:27,680
Speaker 3: that's not even including like compound interest if you decided

808
00:38:27,680 --> 00:38:30,080
Speaker 3: to invest it instead of paying it off your mortgage.

809
00:38:30,120 --> 00:38:32,000
Speaker 2: That's insane. Is that correct?

810
00:38:32,239 --> 00:38:35,959
Speaker 3: That is absolutely correct, And that's way more than one

811
00:38:36,040 --> 00:38:39,760
Speaker 3: year worth of mortgage or payments. So zero point five

812
00:38:39,880 --> 00:38:43,800
Speaker 3: percent could actually mean wiping like three or four years

813
00:38:43,880 --> 00:38:47,040
Speaker 3: off your mortgage to begin with. So like, let's just

814
00:38:47,160 --> 00:38:50,040
Speaker 3: calculate that and work out what that actually means for us,

815
00:38:50,239 --> 00:38:53,000
Speaker 3: because too many times people are like, it's not worth it.

816
00:38:53,000 --> 00:38:56,880
Speaker 3: It's half a percent. I just did the maths. Wasn't quick,

817
00:38:57,200 --> 00:39:02,280
Speaker 3: but it was correct. Lastly, all right, you're welcome. You're welcome.

818
00:39:02,719 --> 00:39:04,799
Speaker 3: The next thing, I don't think anything can be as

819
00:39:04,800 --> 00:39:07,200
Speaker 3: sexy as the maths we just did together, George. But

820
00:39:07,239 --> 00:39:09,440
Speaker 3: the next thing that I feel like is a relatively

821
00:39:09,440 --> 00:39:11,840
Speaker 3: common mistake is forgetting to factor in the cost of

822
00:39:11,920 --> 00:39:14,680
Speaker 3: changing lenders. Like, as we said earlier in this episode,

823
00:39:14,719 --> 00:39:17,920
Speaker 3: while most mortgage brogers don't charge fees for this, there

824
00:39:17,960 --> 00:39:20,960
Speaker 3: are still multiple fees that are attached to mortgage refinancing

825
00:39:21,000 --> 00:39:22,680
Speaker 3: that you need to be aware of. And if you're

826
00:39:22,680 --> 00:39:25,319
Speaker 3: breaking a loan and you're still within the period that

827
00:39:25,360 --> 00:39:27,680
Speaker 3: you had signed up for, it could cost you thousands

828
00:39:27,719 --> 00:39:30,760
Speaker 3: of dollars. So let's just be really careful. I'm hoping

829
00:39:31,080 --> 00:39:33,920
Speaker 3: that this podcast pumps you up and gets you super motivated,

830
00:39:34,120 --> 00:39:36,520
Speaker 3: but not so motivated that we gloss over all the

831
00:39:36,560 --> 00:39:39,319
Speaker 3: important stuff. So to counter this and make sure that

832
00:39:39,440 --> 00:39:41,960
Speaker 3: your decision is the right one to make when it

833
00:39:41,960 --> 00:39:45,040
Speaker 3: comes to refinancing, have a chat with a broker. I

834
00:39:45,120 --> 00:39:48,319
Speaker 3: can't say that enough. The next common mistake that I've

835
00:39:48,360 --> 00:39:51,200
Speaker 3: got listed down here, George is a believing that you

836
00:39:51,320 --> 00:39:55,280
Speaker 3: probably can't refinance a fixed loan. So that is absolutely

837
00:39:55,320 --> 00:39:57,319
Speaker 3: not true. Although it can be a little bit more

838
00:39:57,360 --> 00:39:59,400
Speaker 3: complex and a little bit harder to get out of,

839
00:39:59,480 --> 00:40:01,839
Speaker 3: and maybe there are a few fees attached to it.

840
00:40:01,880 --> 00:40:04,279
Speaker 3: A broker will know what is going on here, but

841
00:40:04,360 --> 00:40:07,479
Speaker 3: it actually could be worth you potentially paying those break

842
00:40:07,520 --> 00:40:10,040
Speaker 3: fees to get a really good interest rate. Like we

843
00:40:10,040 --> 00:40:12,680
Speaker 3: were talking about the eighty six four hundred bank earlier,

844
00:40:12,760 --> 00:40:15,319
Speaker 3: and they're one point nine to nine interest rate, Like

845
00:40:15,440 --> 00:40:18,120
Speaker 3: that's pretty good. Imagine if you were like on a

846
00:40:18,200 --> 00:40:21,719
Speaker 3: standard four percent, which three or four years ago was standard,

847
00:40:22,040 --> 00:40:25,120
Speaker 3: and you're literally going to cut your interest repayments in half,

848
00:40:26,040 --> 00:40:28,800
Speaker 3: maybe that is worth one thousand dollars in a break fee.

849
00:40:28,920 --> 00:40:31,520
Speaker 3: Maybe that is worth two thousand dollars in a break fee.

850
00:40:31,600 --> 00:40:33,640
Speaker 3: You might scoff at that and be like, Victoria on

851
00:40:33,640 --> 00:40:36,160
Speaker 3: thousand dollars is so much money? And I'll be like, yes,

852
00:40:36,239 --> 00:40:38,359
Speaker 3: But did you not hear the example before I gave

853
00:40:38,440 --> 00:40:40,960
Speaker 3: Georgia where you're going to save thirty seven eight hundred

854
00:40:41,000 --> 00:40:44,000
Speaker 3: dollars over the lifetime of your loan. Are you going

855
00:40:44,080 --> 00:40:46,040
Speaker 3: to pay one thousand dollars now to save that in

856
00:40:46,080 --> 00:40:46,520
Speaker 3: the future?

857
00:40:46,760 --> 00:40:48,520
Speaker 2: Maybe yeah, I don't know.

858
00:40:48,840 --> 00:40:51,400
Speaker 3: I just feel like that's really important to consider. And

859
00:40:51,440 --> 00:40:54,319
Speaker 3: the fourth thing g which I feel like I've been

860
00:40:54,440 --> 00:40:57,200
Speaker 3: harping on about recently. When am I not harping on

861
00:40:57,280 --> 00:41:00,239
Speaker 3: about something related to finance, but I did. But the

862
00:41:00,280 --> 00:41:02,640
Speaker 3: other week when we were doing book club and we

863
00:41:02,680 --> 00:41:05,239
Speaker 3: did the first book, The Richest Man in Babylon, and

864
00:41:05,280 --> 00:41:08,680
Speaker 3: I was talking about trusting professionals. So I feel like

865
00:41:08,719 --> 00:41:11,200
Speaker 3: one of the most common mistakes is trusting the wrong

866
00:41:11,239 --> 00:41:14,040
Speaker 3: people and not trusting the professionals and thinking we can

867
00:41:14,080 --> 00:41:17,120
Speaker 3: do it ourselves. Or your dad once refinanced his mortgage,

868
00:41:17,160 --> 00:41:19,200
Speaker 3: so he knows it. And as much as we all

869
00:41:19,239 --> 00:41:21,719
Speaker 3: love our dads and you know, we are grateful to

870
00:41:21,800 --> 00:41:24,560
Speaker 3: have help from family and friends and people that want

871
00:41:24,560 --> 00:41:25,960
Speaker 3: to help. At the end of the day, if they

872
00:41:25,960 --> 00:41:30,480
Speaker 3: aren't finance professionals, I would really avoid taking advice from

873
00:41:30,520 --> 00:41:34,440
Speaker 3: them because George, as I said on that episode, you

874
00:41:34,440 --> 00:41:37,080
Speaker 3: wouldn't buy diamonds off a bricklayer. So I just think

875
00:41:37,120 --> 00:41:39,440
Speaker 3: that it is really important to trust the professionals when

876
00:41:39,480 --> 00:41:42,520
Speaker 3: it comes to refinancing, because even though your uncle George's

877
00:41:42,520 --> 00:41:45,480
Speaker 3: best mate Bill can actually refinance your loan and he

878
00:41:45,560 --> 00:41:47,840
Speaker 3: might have a really solid thing to say, is it

879
00:41:47,920 --> 00:41:50,480
Speaker 3: actually the best thing for you? And given most mortgage

880
00:41:50,480 --> 00:41:52,080
Speaker 3: brokers are free, why aren't we just going to the

881
00:41:52,080 --> 00:41:52,560
Speaker 3: pros G.

882
00:41:53,239 --> 00:41:57,080
Speaker 2: Yeah, definitely. I feel like just because people speak with authority,

883
00:41:57,120 --> 00:41:58,960
Speaker 2: it doesn't mean they are the authority. Art.

884
00:41:59,000 --> 00:42:01,359
Speaker 3: Gee, I actually have one more? Can I add one

885
00:42:01,360 --> 00:42:03,640
Speaker 3: more thing? I said I was done, but I wasn't done.

886
00:42:03,719 --> 00:42:05,560
Speaker 3: I'm not done. Are you ready sit down?

887
00:42:05,800 --> 00:42:06,120
Speaker 2: Please?

888
00:42:06,239 --> 00:42:09,560
Speaker 3: The most important thing is not the interest rate, like

889
00:42:09,680 --> 00:42:11,640
Speaker 3: people seem to think. And I mean, I've just typed

890
00:42:11,680 --> 00:42:13,919
Speaker 3: on about it, so I will absolutely forgive you guys

891
00:42:13,920 --> 00:42:15,600
Speaker 3: if you were like, but I thought the interest rate

892
00:42:15,640 --> 00:42:18,040
Speaker 3: was really important. It is, but it isn't the be

893
00:42:18,239 --> 00:42:20,440
Speaker 3: all end all, Like, don't forget about a whole heap

894
00:42:20,480 --> 00:42:23,000
Speaker 3: of other perks, like potentially having an offset account or

895
00:42:23,000 --> 00:42:25,800
Speaker 3: the ability to split a loan or have a redraw facility,

896
00:42:25,880 --> 00:42:28,680
Speaker 3: if that's in line with your values. Because I'm telling

897
00:42:28,760 --> 00:42:32,040
Speaker 3: you right now, my mortgage is not the lowest interest

898
00:42:32,120 --> 00:42:34,239
Speaker 3: rate on the market, and the reason for that is

899
00:42:34,280 --> 00:42:37,480
Speaker 3: because I wanted to have an offset account facility and

900
00:42:37,520 --> 00:42:40,680
Speaker 3: that wasn't available on the lowest rate loan on the

901
00:42:40,719 --> 00:42:43,520
Speaker 3: market at that time when I did this, what like

902
00:42:43,600 --> 00:42:47,239
Speaker 3: maybe fifteen or sixteen months ago. But I think it's

903
00:42:47,280 --> 00:42:50,560
Speaker 3: really important to not focus solely on the interest rate

904
00:42:50,600 --> 00:42:52,839
Speaker 3: because you might be getting a super good rate, maybe

905
00:42:52,880 --> 00:42:55,600
Speaker 3: you need a really basic loan, but more often than not,

906
00:42:55,800 --> 00:42:58,640
Speaker 3: those super basic loans don't have all the bells and

907
00:42:58,640 --> 00:43:02,920
Speaker 3: whistles that you might want in a mortgage facility. So

908
00:43:02,920 --> 00:43:05,560
Speaker 3: I think that's really important to take into consideration too,

909
00:43:05,640 --> 00:43:06,239
Speaker 3: g V.

910
00:43:06,400 --> 00:43:09,680
Speaker 2: Just before we head off, obviously, the last two years

911
00:43:09,719 --> 00:43:14,839
Speaker 2: for pretty much everyone everywhere have been dumpster fire. You're

912
00:43:14,880 --> 00:43:19,919
Speaker 2: gonna call it garbage fire. So for anyone listening right

913
00:43:19,920 --> 00:43:23,360
Speaker 2: now who is struggling to meet their mortgage repayments, do

914
00:43:23,400 --> 00:43:25,960
Speaker 2: you have any words of wisdom or advice as to

915
00:43:26,000 --> 00:43:29,280
Speaker 2: what they can be doing to make life a little easier,

916
00:43:29,440 --> 00:43:30,359
Speaker 2: of course, I do.

917
00:43:30,520 --> 00:43:33,320
Speaker 3: G I think the first is realizing that you're not alone.

918
00:43:33,520 --> 00:43:36,279
Speaker 3: So many people around the country are going through this

919
00:43:36,360 --> 00:43:39,399
Speaker 3: at the moment, and the best thing you can do

920
00:43:39,560 --> 00:43:41,480
Speaker 3: is reach out for help. If this is something that

921
00:43:41,560 --> 00:43:45,479
Speaker 3: is putting unnecessary pressure on you, please please please pick

922
00:43:45,560 --> 00:43:50,000
Speaker 3: up the phone and call your bank, like, call whoever

923
00:43:50,000 --> 00:43:52,160
Speaker 3: you've got your mortgage with, regardless of who they are,

924
00:43:52,200 --> 00:43:55,720
Speaker 3: and just be like, I'm experiencing financial hardship. I really

925
00:43:55,719 --> 00:43:58,879
Speaker 3: need to have a chat with somebody, and they will

926
00:43:58,920 --> 00:44:02,480
Speaker 3: negotiate with you. And it's not necessarily you having to

927
00:44:02,520 --> 00:44:05,240
Speaker 3: call and fight for your life and negotiate really hard

928
00:44:05,280 --> 00:44:07,360
Speaker 3: to get a bet alone like, that's not what we're doing.

929
00:44:07,719 --> 00:44:09,799
Speaker 3: They might actually turn around and be like, George, we

930
00:44:09,920 --> 00:44:12,440
Speaker 3: totally get it. How about we freeze your mortgage for

931
00:44:12,480 --> 00:44:14,799
Speaker 3: a couple of months and that could actually give you

932
00:44:14,880 --> 00:44:18,560
Speaker 3: the financial freedom to build up a small emergency fund

933
00:44:18,680 --> 00:44:20,600
Speaker 3: so that when you do get back on your feet,

934
00:44:20,719 --> 00:44:23,279
Speaker 3: or once you've had those two months to freeze or

935
00:44:23,280 --> 00:44:26,520
Speaker 3: whatever they might be able to give you, you feel

936
00:44:26,560 --> 00:44:29,279
Speaker 3: a little bit more financially confident. They might be able

937
00:44:29,280 --> 00:44:32,000
Speaker 3: to refinance it. So that your mortgage or payments are lower.

938
00:44:32,080 --> 00:44:35,560
Speaker 3: They might actually have a number of financial hardship things

939
00:44:35,600 --> 00:44:38,120
Speaker 3: that you can lean on. And I think that the

940
00:44:38,160 --> 00:44:42,239
Speaker 3: most important thing here is too often and I have

941
00:44:42,280 --> 00:44:45,200
Speaker 3: this conversation in the She's on the Money community, I

942
00:44:45,280 --> 00:44:48,400
Speaker 3: will recommend to somebody to contact a bank or contact

943
00:44:48,480 --> 00:44:52,360
Speaker 3: somebody and explain that you're experiencing financial hardship. People be like,

944
00:44:52,480 --> 00:44:56,000
Speaker 3: but I'm not homeless. Oh but I do have an income.

945
00:44:56,520 --> 00:45:01,000
Speaker 3: Oh but Victoria, No, no, I'm not experiencing financial heart Like

946
00:45:01,000 --> 00:45:03,520
Speaker 3: I have a thousand dollars in savings, and like, I

947
00:45:03,680 --> 00:45:07,160
Speaker 3: totally get that there might be this stigma around what

948
00:45:07,400 --> 00:45:11,160
Speaker 3: is and isn't financial hardship. But financial hardship is when

949
00:45:11,200 --> 00:45:14,440
Speaker 3: money is stressing you out, and regardless off your financial

950
00:45:14,480 --> 00:45:18,239
Speaker 3: situation or what you do and don't believe, is financial hardship.

951
00:45:18,360 --> 00:45:21,880
Speaker 3: If you are feeling stressed about money, we shouldn't feel

952
00:45:21,880 --> 00:45:24,720
Speaker 3: that way. We should be talking about this. We should

953
00:45:24,760 --> 00:45:27,560
Speaker 3: be having conversations with people. We should be calling up

954
00:45:27,560 --> 00:45:29,520
Speaker 3: our mortgage company and being like, hey, is there anything

955
00:45:29,520 --> 00:45:31,960
Speaker 3: I can do? And maybe they'll say no, But that's

956
00:45:32,000 --> 00:45:33,560
Speaker 3: when we can reach out to our friends at the

957
00:45:33,560 --> 00:45:36,640
Speaker 3: debt free hotline like they're honestly angels, and I'm never

958
00:45:36,719 --> 00:45:39,080
Speaker 3: paid to talk about them. In fact, we've never even

959
00:45:39,160 --> 00:45:41,359
Speaker 3: talked about it. I just am such a big fan

960
00:45:41,400 --> 00:45:44,080
Speaker 3: of their work and what they do. They can help

961
00:45:44,120 --> 00:45:47,560
Speaker 3: you with free financial counseling and again, you don't have

962
00:45:47,680 --> 00:45:51,600
Speaker 3: to be experiencing the worst financial hardship you can even

963
00:45:51,680 --> 00:45:53,839
Speaker 3: think of to be able to reach out and use

964
00:45:53,880 --> 00:45:57,800
Speaker 3: their services. Money is stressing you, that is financial hardship.

965
00:45:58,160 --> 00:46:01,600
Speaker 3: Please use these services exist for a reason, So I

966
00:46:01,640 --> 00:46:04,439
Speaker 3: think that my words of wisdom there would be having

967
00:46:04,440 --> 00:46:06,600
Speaker 3: a look at that obviously having look at your budget

968
00:46:06,640 --> 00:46:08,719
Speaker 3: and cash flow and making sure that you are, you know,

969
00:46:08,880 --> 00:46:11,640
Speaker 3: spending within your values and what needs to be spent.

970
00:46:11,840 --> 00:46:14,399
Speaker 3: But absolutely rely on the professionals here.

971
00:46:14,440 --> 00:46:18,680
Speaker 2: Again, yeah, I've really well said there v as usual guys,

972
00:46:18,760 --> 00:46:22,320
Speaker 2: if you did love today's property focused podcast, then please

973
00:46:22,360 --> 00:46:26,120
Speaker 2: remember to check out the Property Playbook. That's where Victoria Devine,

974
00:46:26,120 --> 00:46:29,359
Speaker 2: herself and our friend Amy Lunardi, who is a home

975
00:46:29,360 --> 00:46:31,960
Speaker 2: buying genius, they go deep on all things properties. So

976
00:46:32,560 --> 00:46:35,360
Speaker 2: if you haven't listened already and you are interested in

977
00:46:35,400 --> 00:46:37,120
Speaker 2: home buying, or you already have brought a home, that

978
00:46:37,239 --> 00:46:39,600
Speaker 2: is the place to go. V Lord, I think that

979
00:46:39,719 --> 00:46:41,160
Speaker 2: is all we have time for today.

980
00:46:41,320 --> 00:46:43,400
Speaker 3: It is all we have time for. But Jay, just

981
00:46:43,440 --> 00:46:45,520
Speaker 3: before we head off, we'd like to acknowledge and pay

982
00:46:45,560 --> 00:46:49,480
Speaker 3: respect to Australia's Aboriginal and torrist Raight Islander people's. They're

983
00:46:49,520 --> 00:46:52,480
Speaker 3: the traditional custodians of the lands, the waterways and the

984
00:46:52,480 --> 00:46:55,960
Speaker 3: skies all across Australia. We thank you for sharing and

985
00:46:56,040 --> 00:46:58,360
Speaker 3: for caring for the land on which we are able

986
00:46:58,400 --> 00:47:01,320
Speaker 3: to learn. We pay our respects the eldest past and present,

987
00:47:01,320 --> 00:47:03,640
Speaker 3: and we share our friendship and our kindness.

988
00:47:03,880 --> 00:47:06,200
Speaker 2: And to remember, guys, that the advice shared on She's

989
00:47:06,239 --> 00:47:08,640
Speaker 2: on the Money is general in nature and does not

990
00:47:08,719 --> 00:47:13,040
Speaker 2: consider your individual circumstances. She's on the Money exists purely

991
00:47:13,080 --> 00:47:16,200
Speaker 2: for educational purposes and should not be relied upon to

992
00:47:16,239 --> 00:47:19,800
Speaker 2: make an investment or a financial decision. Victoria Devine is

993
00:47:19,840 --> 00:47:24,799
Speaker 2: an authorized representative of Infocused Securities Australia Proprietary Limited eight

994
00:47:24,960 --> 00:47:28,040
Speaker 2: and four seven zero nine seven seven nine seven zero

995
00:47:28,120 --> 00:47:31,480
Speaker 2: four nine AFOSL two three six five two three.

996
00:47:31,719 --> 00:47:37,040
Speaker 3: Oh, she got that one out. Good works. G Let's

997
00:47:37,040 --> 00:47:47,239
Speaker 3: see how you go on Friday. Bye guy, Bye guys,