| Now Available | | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | | __5 Ways to Save More Money on Your Mortgage__This book is to mortgages what the Edmonds Cookbook is to cookingClick here to order your copy of this important book.Just $29.95 |
Reducing debt as fast as you can, tailoring your mortgage and negotiating hard with the lender... it's all good stuff and it's laid out for you in Five ways to save more money on your mortgage, the latest book from Martin Hawes.
In an interview with Good Returns, Hawes identified some of the main trends in the mortgage market since his earlier book Save money on your mortgage, published two years ago. "Statistically, it's been the huge growth of mortgage brokers," he says.
"We've also seen the beginnings of the promotion of revolving credit facilities - for example, BNZ Rapid Repay was promoted heavily at the beginning of the year - and there's been a continuation of the trend for lenders to become more sales-oriented."
__Do you think New Zealanders are taking advantage of these trends?__I think the public has been a bit slow to wake up to that. A lot of people approach their bank as if they were some big institution like the IRD....but banks are not like that any more.
__What about the mortgage brokers and mortgage reduction companies?__Mortgage brokers help in educating the public. It's a shame that some of these people aren't (up to scratch). I think the services that the mortgage reduction companies offer for $200 to $300 to set out a plan is a really good deal, but not the more expensive services. I have seen some of their presentations that are downright wrong, however, the actual principles are dead right.
__Do you think that banks and other lenders do a good enough job explaining their loan products to customers?__Banks have started to promote them (revolving credit facilities) quite heavily. Some of them do produce some very good literature saying how this stuff works, but I think people discount it because it's seen as a sales pitch and it's got the bank's logo all over it. A lot of it comes down to a one-on-one basis, when the bank manager is sitting down with the client and discussing it. I think, given the consumers' choice out there, the banks will simply have to provide that service.
As for the non-bank mortgage lenders, I'm sure they're going to grow and that's actually a very good trend. It's another bit of choice for the consumer. They offer some products no-one else does, for example loans where you start off at a low rate and come up later.
__What about the growth of mortgage services available over the Internet?__My understanding of Internet services is that they tend to happen with commodity-type products. Mortgages arebecoming a commodity as the public attitude towards banking changes. In the US, for example, you can go in while doing your shopping to a kiosk, go online, and it will print out a cheque for up to $20,000 while you wait.
I think there are people who would rather do this online, but the one thing holding it back is (the lack of) advice.
__In this latest book, you've included an argument against those people who say it's better to start something of a savings plan before you repay all your debt.__To start a savings plan first versus repaying debt...it's a very expensive way to learn a habit. In my example in the book(in which someone saves over $15,000 on a $100,000 loan by putting a $200/month pay-rise into repayments rather than a super fund), you could pay for an MBA with that!
My other argument on that is if you see rapidly repaying your mortgage as a savings habit, then you're already on the way.
The point of all my books is not necessarily to arm you with enough knowledge to do it all yourself, but with enough so you know the right questions to ask and the basic principles.
__Finally, what about your own mortgage?__I paid off my own mortgage three or four years ago. It's a very nice feeling to be mortgage-free!
