Col Hope, one of our much loved Regional Managers and “mortgage mythbuster”, dispels some myths about switching your home loan from a bank.
I’ve been hosting some free forums on the NSW Central Coast and Gold Coast this month for people wanting to make the Great Escape from their bank.
There are a lot of people who are dissatisfied with their bank and want to switch to other lenders.
There are a number of emotional reasons why people want out of a relationship with their bank. I hear comments like this all the time.
- “I’m not getting the level of service I want”.
- “I don’t like how Banks dominate the market”.
- “I don’t like the profits they make”.
There are also a number of financial reasons why people want out of a relationship with their bank. They want reduce their repayments, get out of debt faster and save money through:
- better interest rates
- lower fees and
- consolidation of small debts.
Unfortunately there are a few misconceptions about switching from a bank to another lender. Here are the facts.
MYTH NO.1: Switching is too hard
We are all a bit time poor these days and it can be hard to get time away from work to go and see another lender. So, just ask them to come to you. The Greater has mobile lenders who can see you when it is convenient for you. The process of switching is relatively simple and you don’t have to involve solicitors.
MYTH NO.2: Switching takes too long.
The time taken for people to switch their loan from a bank to the Greater averages at about two weeks, which isn’t a long time in the scheme of things.
The Greater has introduced a “Fast Refi” service which means for many home loans, the contract can be signed within a couple of days and funds advanced two to three days later.
MYTH NO.3: I have to talk to my current bank before I leave them.
You don’t need to speak to your old bank if you keep your loan statements and know your payout figure. Greater Branch Managers can do the work for you.
MYTH NO.4: Exit fees make it too expensive to switch
The major banks are cutting exit fees and they have been correctly pointing out that in most cases they are not that high.
Even if they average at around $1,000, this is a fee worth paying if switching is going to save you thousands. On current rates, a person with a $285,000 Greater standard variable home loan can be up to $33,000 better off than someone on the average rate of the four major banks’ standard variable loans.
MYTH NO.5: The effort isn’t worth it
Nothing good comes without a little effort. But we have already established that there is generally not that much effort required to switch your Home Loan.
If you are saving $33,000 and it takes you a whole day that’s not a bad day’s pay!
We had a lady in one of the forums who had a $380,000 home loan with a bank. We showed her in five minutes how she could save up to $157,000 and take up to six years off her loan. How much effort would you have or be willing to exert to make $157,000?
ASIC have an excellent tool on their website you can use to calculate what you might save by escaping from your bank
There is always a way out of a banking relationship you don’t want to be in. Refinancing your mortgage isn’t as difficult as the banks would like people to think.
Want to make the Great Escape? Call me or one of my colleagues on 131386 or visit one of our branches for more information.