Refinancing your mortgage can seem like a daunting and time-consuming task. For the most part that is true, but as with most things in life, hard work brings high reward, and so it is true of refinancing. That said, there are professionals who are ready, willing and able to help make this process as easy as possible and get you the best possible result.
Why Refinance?
The obvious reason to refinance your home loan is that there are better interest rates or packaged products now available. Whether this is due to a change in your financial position, lower current market interest rates or more competitive packages becoming available, it is always a good idea to review your current facility in line with what’s on offer.
When to refinance?
Timing is everything when it comes to making plans around changing your current finance provider or product. There are a number of factors at play here:
1. Market Movements
2. Life Events
3. Changes to your credit rating
4. Equity movements in your property.
Each of these factors can have a huge impact on when you refinance and how much you stand to gain. Talking with a mortgage expert could unearth some interesting opportunities that you might not have considered.
Critical Steps
1. Review your current situation.
After a few years, your mortgage payments, for most borrowers become an accepted and unchallenged part of your monthly budget. It is easy as a borrower to forget the details of your facility such as fixed interest terms, monthly and annual fees, exit fees and lenders mortgage insurance (LMI) rates. Before you start researching, making sure you know the facts of your own mortgage to ensure that you know what you are comparing, and what you are looking for.
2. Know what you want.
Customers refinance their home loans for many different reasons. Are you looking for better add on benefits, such as an offset account, or early payment fee waivers? Are you looking to lower your repayments due to changes in your finances? Are you wanting to make the most of the current equity in your property? It is different for everyone, so make sure you have a clear understanding of your goals before leaping in.
3. Do Your Research.
It is easier now more than ever to quickly and thoroughly compare the different products available on the market. Whilst comparison websites are a great starting point, they don’t always provide impartial information and they definitely don’t provide the full picture. By researching products on individual lenders websites, you are bound to find out more detailed information about what they can offer you. Keep track of what you find in a spreadsheet with a link to the URL for revisiting as required. By keeping this information together, you will make it easier to make your own comparisons rather than rely on third party comparisons sites.
4. Get 3rd party advice.
Refinancing your home loan isn’t something you do every day. However, for mortgage experts, it is. Brokers help a wide portfolio of customers, all at different stages of their home owning journey and have a wealth of experience with current market conditions. By engaging a professional, you are giving yourself the best team to make the right decision for you and your family.
5. Don’t settle for standard.
Chances are that if you have had more than a few years of on-time payments, you are a much better risk to the bank than a first home buyer. This means that your power to negotiate is much better than it was when you were first starting out. This often means, that lenders will consider make changes to standard products in order to win your business, . When refinancing, this can be a hugely helpful and allow you and your broker to get you the best possible deal! Don’t be afraid to negotiate!
Whilst refinancing can seem like a daunting task, with the help of an industry professional it can be a very straight forward process and lead to huge long-term savings for you and your family. For anyone who is nearing a key milestone (5 years, 10 years etc) it is always a good idea to look at the facts, compare the options and make sure you are getting the best possible deal for your current situation.
