What you need to Ask before refinancing your home loan and how it may help you

By Amanda Amey
In First Home Buyer, Investment, Mermaid Waters, Refinancing

 

It’s all too easy to rack up debt or listen to people tell you to refinance your existing home loan.  The question you need to ask is if it will improve your position, save you money, or allow you to carry out your long term goal of (perhaps) a back yard swimming pool or home improvements.  There are alot of questions to ask before you jump in.  With us, you can be sure to receive transparent answers as well as easy to understand day-to-day words and explanations.  We are your advocates and here to help you through the maze of financial jargon and lender terms.

1.Reasons to refinance
Refinancing is the process of taking out a new loan and paying out your old loan. There are numerous reasons and benefits to moving to a new home loan, and these may include considerations like your current repayments, the term of your loan, whether you want to draw on the equity from your loan for home improvements or a new back yard pool, or simply to  chase improved features and interest rates.

2. Costs to refinance
Each lender and product can vary in their costs to refinance, however a good broker will outline these costs and compare them to the savings you can make by switching over. This comparison is imperative to the overall benefit to you, the customer, and should be outlined in detail. Some lenders will offer promotional deals to encourage a refinance to their products. Your broker should source these and access suitable promotional offers or fee waivers. Your broker will be able to update you on any government charges in your state or territory.

3. Will I have to pay mortgage insurance again?
If you had to pay mortgage insurance previously and are still borrowing more than 80% of the value of your security property, chances are you will need to pay new mortgage insurance. As this is an insurance for the lender, it’s a mandatory requirement and a cost you may not be able to avoid. Ask your broker if you will need to pay mortgage insurance, it might be more suitable to stay with the same lender, but change products.

4.  New and old features and fees
Be sure to discuss the features of the new loan and ask your broker to compare them to your existing loan. Not all loans come with offset features, redraw facilities or allow extra repayments.  Some products charge you a monthly fee, an annual fee, or no fee at all.  Understanding your exit costs as well as your ongoing costs is imperative to ensuring that the product is right for you.

5.  Is it better to go it alone, or to use a broker?
Remember that as a broker, we work for you. We are a species that work for you, but are paid by the lender. As a broker, we are able to source a multitude of lenders and products, all offering different promotions, products, fees and rates. It is our job to sieve through the maze of options and deliver to you a suitable product that suits your needs. We will guide you through the entire process, explain the forms that you are signing and help you through the journey.

“Mandy has been so professional, efficient and reliable through the whole process and kept me updated step by step. Mandy was able to get me a cheaper interest rate on my home loan saving me heaps of money and allowing extra money for my new kitchen. Thank you so much Mandy I am so happy. I would highly recommend Mandy. ”
Brooke McInerney

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