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Case Study – Borrowing When You Are "Older"

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Many of you will know Terry Ryder as a well-respected commentator on property markets whose business is Hotspotting.com.au which offers great resources and information for property buyers. Terry refinanced with Louise and shares some of his insights into borrowing when the lenders might consider you past your “use-by” date…..

Q.  How long have you known Louise and how did you connect?
I met Louise when she part of another national group, run by a woman of ill repute, whose name I dare not mention. I was invited to speak at some of Louise’s seminars. I tried to say no but, as many will know, Louise can be quite persistent. So my public speaking career was launched. Essentially, she created a monster.Q. I
s the recent borrowing you did the first time you have used Louise’s services?
The re-financing of a couple of loans which I did a year or so ago, was the first time I have used Louse’s services.Q. 
What prompted you to do so?
She kept telling me how good she was, so I decided to give her a try!Q. 
I understand this was a refinance application for you.  What was the outcome you were hoping to achieve?
A better deal with a lower interest rate. Sadly, lenders offer their good deals only to new customers – I asked ANZ to give me a lower interest rate, in line with their special offers to new customers, but they declined. So I decided to follow Louise’s advice and switch, thereby achieving significantly lower interest rates.Q. 
Lenders are now quite insistent on having an exit strategy for over 50s or even over 40s these days – what was required of you?
Who says I’m over 50? Oh, okay, it’s obvious. The new lender insisted on having a shorter loan term, because of my advanced years. That suited me because on the main loan I wanted to pay it off as quickly as possible.Q. 
How long did the process take? The paperwork required can be quite daunting, so how can people make themselves better prepared for the process?
The process took longer than expected, mainly because of fluffing around by the bank. They’re not well organised and keep coming back asking for more information, instead of asking for everything they need in the beginning. This is fairly normal so you just have to wear it. And you have to be willing to wade through thick documents to check things before you sign. It’s a pain but you have to do it – and it’s worth it to achieve a better situation with a lower interest rate.Q. 
What issues did you encounter that you were unprepared for or could not see relevance?
No matter how many times I go through it or hear about it, I’m always unprepared for the stunning disorganisation and inefficiency of banking organisations. I don’t know how mortgage brokers deal with it on a daily basis. It probably helps to be crazy.

Q. Louise says you are the only borrower she has met who has read the Mortgage Documents!  Did you learn anything by doing so or just that they essentially protect the lender, so not much you can do? 
I can’t remember the details, but I did come across a number of issues I needed to clarify. The documents were in fairly simple English so were not difficult to understand. Mostly it’s superfluous waffle, and lots of it, but I thought it was important to read through the documents before signing my life away. Apparently no one else ever does this, so it seems I’m a freak of some sort.

Q. Do you have any comments to make or any other suggestions to assist the people borrowing/investing when “older”? 
Be prepared for age-ism. I plan to live well into my Nineties, but apparently the banking industry thinks this is unlikely, so they put you in a “likely to die soon” pigeon hole. The main issue to deal with is a shorter loan term, which means your monthly payments are higher than “normal” borrowers.*

Q. Do you plan to invest further in property as part of your “retirement” plans?
Yes, I plan to do further investing, with an emphasis on value-adding strategies to accelerate the creation of equity. My goal is to retire before I turn 95.
If you would like to find out more about Terry and his business and subscribe to receiving his Reports, please visit www.hotspotting.com.au 
NB *Most loans can be arranged for older people over 30 year terms – it just depends on the lender. Some will, many won’t, but sometimes if you want a really cheap rate, a lender might ask you to pay it off more quickly.


MAY 22 NETWORKING & WORKSHOP

You are invited to attend our next event on Tuesday, May 22 at Milanos in Brighton
5.30pm – 7.00pm – Networking and Canapés (drinks available at bar)
7.00pm – 9.00pm – Workshop Presentation
Property Education Clients – FREE
BBN Members – FREE
General Admission – $35.00 (booking fee applies)
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Please feel free to contact us on 1300 881 220 if you would like to arrange a time to review your situation.
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