Here is a typical scenario for a loyal Bank Mortgage Holder.

After depositing sufficient funds to a checking account to cover the monthly automatic mortgage payment with plenty of time to spare. You get a call from the bank asking for a payment to your mortgage. You reply that it is an auto debit from your checking account and that there was plenty in the account to cover their payment. They then accuse you of not paying on time and list a series of fees you are going to be slugged if you don’t pay up today. You are offended, but swallow hard and say you will fix it, but it is the banks problem not yours.

You contact the branch, they say your deposit was posted incorrectly and that they are sorry and will correct the problem immediatly with the mortgage area and that all fees and interest overcharge will be refunded. While not 100% happy, you let it go at this and trust the bank to do the right thing.

Big mistake! three days later you get a call from the bank’s mortgage collection department demanding payment immediately. You explain that you contacted the branch and that they said they would fix it. The mortgage department continue to demand payment, they say they have heard it all before.

You contact your branch manager and explain nicely that you are being harassed! “Didn’t they take care of it”. She explains! No you say, they have been leaving harassing calls on my answering machine. The branch manager then says she will call the dispute department and get it taken care of and that she would ring you back. She rings you back and you even get a letter of apology from the branch. So you rightly think you have put the matter to bed.

Wrong! Sure they may have refunded some of the fees, but what about the penalty interest rate? Sometimes they charge a penalty rate on your entire loan for they period, not just the missed payment amount. This can be $100′s of dollars, depending on the size of your loan.

So how do you get this overcharge corrected. Work out by hand and calculator how much you have been overcharged? This will take a long time and will probably not be accepted by the bank.

My advice is to use a statement checking program that has some credibility with the Federal Trade Commission or the Banking Ombudsman. The evidence produced by such a program will be undeniable and force the bank to cooperate with you.

Most online statement checking software providers will also help you prepare your case.

A little bit of homework before you commit to a home loan can save you hundreds of dollars per month on your mortgage payments. Using free home loan calculators like the Commonwealth Banks home loan calculator will help you get a quick understanding of your required budget and provide some evidence in case a bank tries to overcharge.

Playing around with the figures will also let you know the result of future interest rate rises.

There are other free calculators available including personal loan and debt consolidation all worth a look.

Another calculator that can save you money is the Mortgage Watchdog home loan statement checker. You can download a free trial and check your statements for errors very easily.

Australian’s that I come in contact with seem to have overcome their addiction to retail therapy.

If you are working in retail, you may find you will be doing more hours and being asked by your boss to do some unusual promotion.

From the media releases › 2010 › Statement by Glenn Stevens, RBA Governor: Monetary Policy Decision:

“With the risk of serious economic contraction in Australia having passed some time ago, the Board has been adjusting the cash rate towards levels that would be consistent with interest rates to borrowers being close to the average experience over the past decade or more. The Board expects that, as a result of today’s decision, rates for most borrowers will be around average levels. This represents a significant adjustment from the very expansionary settings reached a year ago.

The Board will continue to assess prospects for demand and inflation, and set monetary policy as needed to achieve an average inflation rate of 2–3 per cent over time.”]

The message is mixed, but my gut feeling is the board think the economy is in a boom/bust wave. The RBA understands that “Mining” is not a sustainable industry. It produces very few real jobs and uses massive amounts of public sponsored infrastructure. When the ore runs out or a new product replaces the old “made from iron”, the mining executives will probably go back to banking and the workers on the dole. Property price’s will adjust and a new cycle will start.

As home buyer’s and a property investor’s we can only deal with our own micro economies. We have to talk to our mortgage brokers and bankers and get the best deal we can for our circumstances.

Oh! And please check your loan statements for errors. I recently got charged twice for a line fee on one of my loans. It took three weeks to get it refunded. Interest rate increases are a prime time for lenders to make errors.

Reputable Mortgage Broker.

Please watch the video, if you have not seen it, you will be shocked!!

I highly recommend this software. Go to the website and check it out for yourself and try it for free.

Free trial, no catches.

Click here to view the embedded video.

Mortgage Watchdog.com.au

Thanks for coming to my blog.

The bad news of the day is that the RBA has increased its cash benchmark
rate by 25 basis points (to 4.25%).

The RBA has been spooked by real-estate data indicating an Australia wide increase in property prices.

Making it hard to borrow or hard to repay is one way to curb home owner or prospective home buyer enthusiasm.

So what can we do? Already Australia’s biggest home lender the Commonwealth Bank, has announced that it will increase its variable rate by the .25% starting this Friday. The rest of bailed out banks will no doubt follow suit in the days ahead.

Try and pay off all your loans and credit cards as quickly as possible. Chop up your card if you can, or at least take some time to understand how a debt consolidation loan may help. Sell your second car, car pool or take the bus. Switch to Naked DSL instead of a land telephone line. Search for a cheaper power supplier or embrace solar energy. Put in a water tank. Grow a veggie garden. Start jogging instead of going out. (You can meet some really interesting people jogging on the beach.) Brew your own beer. Get the idea? I think we are headed for a big recession, but the RBA thinks it has some divine providence after it flukes the idea of dropping of interest rates in 2008 and 2009.

Better to be ready, and who knows, luxury items and big TV’s may be cheaper next year.

Foot note: When rates go up banks make mistakes. Check your Home loan statements

If you have a line of credit/home equity home loan, I suggest you dig out your mortgage documents and go over your rights and obligations. Pay special attention to the fine print regarding when you have to pay the loan back and when your lender can demand you pay the loan back.

With the tightening of lending criteria, many lenders are now looking at their loan books and increasing the rates on certain home loan products. In particular they are looking closely at low doc lines of credit.

My mail is they will be adding an extra basis point or two to the rate of these types of home loans and in some case’s recalling the loan altogether. If you can convert to a full doc, do so as soon as possible or speak to your mortgage broker about your options.

Finally, check your statements, lender’s, particularly major banks make mistakes whenever there is an interest rate change. Stay on top of your finances and get some loan statement checking software. I recommend a program it is reviewed on my mortgage checker web page.

Spend what you save on a holiday or some tennis lessons for the children.

Should I lock the rate on my home loan?
This is an interesting question, and given the recent press leaks from the experts on what we should be paying for our home loans, it seems rates are unlikely to go lower. Even the RBA seems to have joined the: rates have bottomed chorus, so we are likely at the bottom of low rate the cycle. So maybe it is worth doing your sums on a rate lock.

Check with a reputable mortgage broker what rates are on offer before you jump, you may be wise to kick your old bank to the curb and find a new lender.

The main benefit of a rate lock is certainty. You will at least know what you have to pay for the period of fixed rate you choose. You may also be getting a jump on the banks, as they are likely to increase rates further if they think the market will handle it.

The downside is if rates drop further. Check out the history of rates for the last fifty years.

And finally check your loan statements, banks make mistakes every minute, make sure you are not getting ripped off. Click here for more info on loan checking software.

I feel like shouting at the TV when this stuff rears its head again. Get yourself some loan checking software please.

The software has been seen on…
A Current Affair
Money
7:30 Report
4 Corners
Today Tonight

If you don’t want to check your statements, be aware you may be paying a lot more of your hard earned cash to the bank than you need to. For goodness sake keep a close eye on your home loan statements.

Why is this good news? Less new dwellings being built, mean tighter supply and a probable increase in value for current stock, well that’s the theory anyway.

The reality is Australian home affordability is out of kilter with wages and incomes.
So instead of home ownership being right of all Australians, it is for now, an elite privilege.

I also see the Government’s tax revenue (It’s major income source) is down 19% for the September 08 quarter, yet it’s expense’s rose across the board. The Governments credit card is close to maxed out. Tax revenue will have to increase, or we may find the government shedding jobs. What will that do for property values?

My research into commercial properties has revealed the market to be dead in the water. Sellers are asking premium price, buyers in the main are adopting a wait and see policy.
Drive around a factory precinct near you, count the deserted properties. My gut feel is for a 50 to 60% drop in values for these properties shortly.

It is time to re-evaluate your banking, you want to cut fees, consolidate your debts, check out better deals, whatever saves you money. Get some loan checking software and use it to check your credit cards, business loans and home loans.

The International Monetary Fund has for some time voiced a considered opinion that: “Australian property is among the most overvalued in the developed world.“ International investors have heeded the IMF’s warning and are quitting their Australian holdings in the droves. New enquiries have all but dried up.

February 2009 is the perfect time to ready yourself for the turbulent time ahead. Consolidate your debts, sign your tenants to a longer lease, crack down on tardy payers. Repair and maintain your properties to keep them in top condition. Check your mortgage interest rate, get the lowest rate mortgage available or convert to interest only if you can and get some quality mortgage checking software.