We’ve spoken to a few clients recently who have received phone calls from their lender. It all starts out innocently enough.
‘Lenny’ wants to know if you’re happy with your current loan.
He wants to know if things are all ticking along as they should.
And he wants to know if there is anything he can help you with.
The next thing you know, you’ve been locked into a fixed rate loan you weren’t sure you actually wanted or you’ve somehow agreed to increase your credit card limit.
We don’t have an issue with your lender calling to check-in with you. After all, you have your loan and/or banking with them and you pay the lender interest on a pretty regular basis. It makes sense that your lender would want to touch base with their clients, just like we do – through regular phone calls, emails and updates.
However, we do have an issue when Lenny suggests – and then implements – things you don’t actually want. Things you haven’t had time to properly consider. Or things that don’t help you achieve your objectives.
It’s not all Lenny’s fault. He doesn’t always know what you’re trying to achieve because he hasn’t spent the time to understand your personal situation. In many cases, Lenny doesn’t even know that what he’s recommending doesn’t benefit you, because he’s only looking at things from his employer’s perspective.
(Side note – from a legal perspective, Lenny’s not even required to act in your best interests by recommending products that suit you, because he’s not bound by the same regulations and code of conduct that an accredited mortgage broker is).
Offering you a fee-free savings account does NOT benefit you if you already have an offset account linked to your owner-occupied debt. (This has happened in more instances than we can count.)
Offering to increase your credit card limit does NOT benefit you if you’re already having trouble managing existing personal debt or it’s going to reduce your future borrowing capacity.
Convincing you to lock in a fixed rate loan will NOT benefit you if you’re thinking of selling soon or wanting explore a refinance.
Combining loans “to make your banking simpler” will NOT benefit you if Lenny ties up more of your security than necessary. And please note – things will NOT be simpler if your investment debt is mixed with owner occupied debt. (Just ask your accountant!)
Switching repayments from Principal and Interest over to Interest Only will NOT necessarily benefit you – especially if you’re trying to pay down the loan. We’ve had some recent cases where Lenny has suggested this, but instead could have just offered you a lower rate to help reduce your monthly repayment commitment.
You don’t need to hang up the phone as soon as you find out it’s Lenny on the line because there’s been the odd occasion where Lenny has offered something that does make sense. He might offer a competitive variable rate when your fixed rate loan is about to roll off the fixed rate period, for example.
But PLEASE do have a chat to us before you agree to anything. We’d like to ensure that before you agree to any changes, you stand to gain a benefit and it’s not just something Lenny has offered you to enhance his quarterly numbers.
We’re here to help.
