Every property investor (except for a few rare exceptions) needs to use a bank, or some form of lender, to undertake their activities. Without a lender, we wouldn’t be able to invest. We need someone to lend us some money to buy our properties and renovate if we choose.
BY VANESSA DE GROOT
But how many people really pay that much attention to their lender, or really research all the lenders out there before deciding which they’ll go with?
And what’s the main motivation for picking a particular lender? I know for me the main consideration is the interest rate – after all, I want to be paying the least amount of money for my borrowings to make the greatest profit possible from my investments.
But apart from interest rates, I also value lenders that offer no fees for their products, have flexibility and facilities available such as redraw and offset accounts.
When deciding on a lender in the past, I primarily relied on a mortgage broker to find me
the best product. Now, don’t get me wrong, I haven’t just blindly accepted the option they’ve given me. I’ve often been to several mortgage brokers to see which different products they offer and then I research the bank they suggest to check it all out and make sure it’s the right fit for me.
After we go through the initial process of finding a bank and getting funds though, how much does our bank, or lender, really affect our activities? I don’t really think about my lender at all once the transaction’s done and they’ve lent me the money. I pay them money each month and that’s about it. The only thing that bothers me is whether they pass on interest rate cuts/hikes as set by the Reserve Bank of Australia and if they do the right thing, I’m happy.
So really I’d say I’m pretty nonchalant about my lender for the most part. And you know what? I think they feel the same way about me!
I don’t think anyone would be surprised about that though. Banks are known to be quite uncaring towards their customers, aren’t they? They take big profits for themselves and take as much from the little people as they can, right?
It’s really been hammered home to me lately just how undervalued I am by my lender though. There are periods of time when I receive weekly calls from them and one of these times was just last month.
I received a call from the manager of the branch asking me how I was and that my business was valued and then he offered me a home loan. When I informed him that I actually had two loans with them already, he was completely shocked and thanked me profusely, then asked me if I wanted another one, or if I wanted to undertake any renovations that they could lend me money for.
I didn’t think too much of this phone call, but then the following week I received another one from someone else at the same branch, and I had the exact same conversation with them. I hung up totally baffled by this. Presumably they’ve seen that I have a bank account with them and before calling me have not even bothered to do their research (which surely would just be the click of a button on a computer screen wouldn’t it?) and find out that I already had home loans with them.
I’m quite shocked that in this day and age, when lenders need to be competitive, they don’t even bother to find out their customer’s details before calling them and trying to get more business. It would take two minutes to do and would surely make all the difference in the world!
What happened to the old days when bank managers knew their customers by face and name, and you could ring them direct? I say bring back those days. And while I believe banks should take more of an interest in us, their clients, I also think we should take more of an interest in our bank. And if you’re not happy, make a move!
Vanessa De Groot is the deputy editor of Australian Property Investor magazine, www.apimagazine.com.au