With rising living costs, it’s essential to review your home loan regularly to ensure it’s still competitive. Refinancing can be a way to save money, but there are important factors to consider before switching lenders.
Key Questions to Ask Before Refinancing
- What’s the Cost of Refinancing and does it Outweigh the Benefit?
- Understand all costs involved in refinancing and compare them to the potential savings. Common costs include:
- Discharge Fee: Fee for leaving your current lender.
- Mortgage Registration Fee: Fee to register your new home loan.
- Fixed Loan Break Fee: Applicable if you have a fixed-rate loan.
- Exit Fee: Fee for breaking your loan term early.
- Settlement Fee: Fee with the new lender.
- Property Valuation: Required by the new lender.
- Lenders Mortgage Insurance (LMI): Needed if borrowing more than 80% of the property’s value.
- Title Search Fee: Ensures no outstanding claims on your property.
- Understand all costs involved in refinancing and compare them to the potential savings. Common costs include:
- Which Loans Will Suit my Situation?
- Choose a loan that aligns with your current financial situation and goals:
- Fixed Rate Loan: Provides certainty of repayments.
- Variable Rate Loan: Potentially beneficial if interest rates decrease.
- Split Loan: Combines the security of fixed rates and the flexibility of variable rates.
- Consider features like a redraw facility or offset account to save interest, and options for making bigger or more frequent repayments to pay off the loan sooner.
- Choose a loan that aligns with your current financial situation and goals:
- Can I Increase my Loan?
- Refinancing can be an opportunity to top up your loan for:
- Renovations.
- Purchasing an investment property.
- Buying a new car.
- Traveling.
- Accessing additional funds through refinancing can help you achieve various financial goals.
- Refinancing can be an opportunity to top up your loan for:
- Would I Benefit from Debt Consolidation?
- Combining multiple debts (e.g., personal loans, credit card debt) into your home loan can simplify repayments.
- Note that this may result in paying more interest over the life of the loan, so careful consideration and calculations are necessary.
Getting Professional Help
Refinancing your home loan can be a smart financial move, but it’s not suitable for everyone. Here’s how we, as mortgage brokers, can assist you in evaluating whether refinancing is the right choice for your unique situation.
How We Can Help
- Finding a More Competitive Home Loan
- We’ll search for home loan options that offer better rates and terms compared to your current loan.
- Explaining Fee Differences
- We’ll break down all the costs associated with refinancing, such as discharge fees, mortgage registration fees, and any potential break fees for fixed-rate loans.
- Serviceability Criteria
- Understanding your ability to meet the repayments on the new loan is crucial. We’ll assess your financial situation to ensure you can comfortably manage the new loan.
- Turnaround Times
- We’ll provide information on how long the refinancing process will take, so you can plan accordingly.
- Providing Detailed Information
- You’ll receive a comprehensive overview of the potential benefits and drawbacks of refinancing, helping you make an informed decision.
Next Steps
If you’re interested in exploring refinancing options, get in touch with us. We’ll work through the details and help you determine the best course of action to potentially save money and better meet your financial needs. Contact us today to start the conversation and take the first step toward a more financially advantageous home loan.
