Why Barefoot Investor loves it when you bully your bank to get a better mortgage rate

Thanks to Barefoot Investor’s advice John and Suzie were able to get a home loan rate cut from their bank and a $2000 reward for being a loyal customer. See how they did it.

Scott Pape is The Barefoot Investor. Supplied

A mate of mine is a fireman … so his kids get to ride in his fire engine and even get to blast the siren.

I’m a finance guy, so my kids get to … beta-test the new Commonwealth Bank app for kids.

“Nee-Naw-Nee-Naw, our dad has the most boring job on the planet!”

(Yes, kids, but it pays the bills!)

Seriously, though, last week I received an invitation to venture deep into enemy territory — CommBank HQ! I think it’s fair to say that we haven’t seen eye to eye in the past (and I may have had a bit to do with culling their 90-year-old school banking program, the Dollarmites). Yet they still invited me for a sneak peek of their new pocketmoney app.

They’re calling it KIT, which stands for Keep In Touch (with your money). KIT is basically CommBank’s answer to the NAB-backed Spriggy. Yet there’s one really important difference: whereas Spriggy is designed for parents, KIT is designed for kids. (In fact, there is no ‘parent wallet’, other than a secret code for parents to pay their kids’ money.) I think this is actually really smart.

Is it time to put the jam jars away? CBA has launched a new pocketmoney app called KIT.

Do I think apps like this are going to change the pocketmoney game?

Maybe.

Then again, we still mainly use jam jars with our kids. After all, kids are visual … and I don’t have to remember any passwords or pay expensive annual fees for kid apps.

Still, I’ve committed to having the kids be part of the beta test and give their thoughts. I think they’ll enjoy it … if only because they rarely get to play on a screen. (I reckon I could load up a CommBank Annual Report on an iPad and they’d sit there swiping at it for hours.)

Stay tuned.

Tread Your Own Path!

Barefoot, How Do I Get a Book Deal?

Scott,

I have written a book that aims to help people through the process of getting fired, because I think there is a lack of material out there on this topic and I have unique knowledge on it. I’ve been fired myself, and I’ve fired countless others in my career … so I have experience on both sides.

My book helps people deal with the shame of getting fired, but it also covers practical steps of what to do in the immediate aftermath to secure short-term and long-term income, including how to get your next job and what to say about what has happened. I also cover steps to avoid being fired in the first place if you suspect you might be, or if you’re on a PIP (performance improvement plan).

I’ve reached out to literary agents and publishers I found on the internet, but I suspect I’m not getting anywhere because I’m a nobody. But I passionately believe that the message in my book will help others. A smidgen of help or advice, or an introduction to an agent, would be awesome.

Lisa

Hi Lisa,

What a great pitch!

Here’s my advice: don’t start with a book.

A literary agent won’t help you, because publishers don’t want you … yet.

Instead, start a podcast. Then be a guest on other podcasts. Help people and turn them into case studies, and post their stories on your blog. In other words, own the ‘getting fired’ space.

When you do, you’ll have publishers beating down your door.

That’s when you should email me back, and I’ll introduce you to my agent. She’ll cut you a book deal that will play all the publishers off against each other.

We’re Hitting The Open Road

Scott,

We want to leave our comfortable life and travel for the next four years. My hubby wants to sell the house and invest that money into an index fund. He says it will be safer than leaving our property with tenants and will be one less worry and cost while we are gone. Also, it’s likely we won’t end up coming back to this part of the country anyways. I am terrified we won’t be able to get back on the property ladder when we settle down again. Is an index fund good enough to keep our money growing for four years, compared to our home?

Laney

Scott Pape says it may make more sense to keep your property and rent it out, rather than sell it, if you are planning a period of extended travel and worried about your finances.

Hi Laney,

You should book in and see a financial advisor and ask them your question.

Their answer should be: “I have absolutely no idea where stocks will be trading in four years’ time.”

Laney, the question you’re asking depends on factors outside of your control. Instead, a good financial advisor should look at things you can control – like your goals, and your fears.

And if you’re “terrified” that you won’t be able to get back on the property ladder then you might at least consider renting out your home while you’re away.

Reason being, the Tax Office allows you to rent out your home for up to six years without subjecting it to capital gains tax (CGT), meaning you could get the income while you’re away travelling and sell it tax free when you return.

Financial Planner Please!

Hey Scott,

Can the National Debt Helpline assist people who have no debt but need to work out what to do with their dwindling resources in retirement? I’m an accountant who knows a lot of people that really need some help understanding and figuring out their finances (legally I can’t give advice). If they can’t help, is there someone who can?

Thanks, Garry

G’day Garry,

Yes, there is.

Tell your clients to call Centrelink on 132 300 and arrange a face-to-face meeting with one of their Financial Information Service Officers (FISOs). They can help people sort out their Centrelink entitlements and will give unbiased general retirement planning advice that lays out their options, without the hard sell. It’s a free service, and I wish more pensioners knew about it.

Bullying the Banks

Hi Scott,

With more equity in the house this year, I built up the courage to contact our bank, CBA, and request a better deal. With little hassle they dropped their rate by 0.15%. I mentioned a much more appealing rate at a rival with a $4,000 cashback offer, yet the best they could do was a further 0.02%.

So we started the refinancing route. After we’d filled out a multitude of forms through a broker, our friends from the CBA were in contact asking why we wanted to discharge our loan. I politely indicated we made them aware of this before deciding to pursue the better offer. The CBA has now offered to reduce our rate below the rival rate and thrown in $2,000 in cash to reward us for being a loyal customer. Thank you for everything you do!

John and Suzie

It is often possible to get a better mortgage rate if you contact your bank.

Hey guys,

Oh, I love, love, love this. You bullied the banks!

And it doesn’t stop there. Putting that $2,000 against your loan is going to have a compounding effect over the years, slashing the time it takes you to become debt free.

Having said that, I’d be tempted to take at least a few hundred bucks and have a fancy-pants dinner. You deserve it!

Thank you for reading,

Scott

Information and opinions provided in this column are general in nature and have been prepared for educational purposes only. Always seek personal financial advice tailored to your specific needs before making financial and investment decisions

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