- Posted 11 Feb
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When trawling financial resources for ways to save money on your home mortgage, refinancing is usually the first piece of advice you’ll find, no matter where you look. And there’s a very good reason for that – it’s the best way to do it.
Unfortunately, it’s not just a simple one-click solution. There are several pieces of information you should equip yourself with before signing on the dotted line.
Understanding the fine print is crucial; the right deal can save you a lot of money and give you the peace of mind you’re looking for.
The following tips will give you a comprehensive overview of what you need to know before you take that next step.
Ask Yourself: Does It Make Sense?
Refinancing is a solid option for a lot of homeowners, but that doesn’t mean it’s necessarily right for you. Don’t just look at your new monthly outgoings, but review your options as a whole. It’s not all about the percentages.
Weigh up the benefits and downsides carefully and make decisions based on the balance. Don’t assume that refinancing will save you money by default – getting the right deal and choosing the right company is a big part of making it work for you.
Refinancing Exit Fees
Otherwise known as early termination or discharge fees, exit fees are often put in place by lenders to discourage refinancing. Be careful that you won’t be stung with a high one-off figure. The amount alone can lead to hefty implications to the monthly savings you originally had in mind.
New Establishment/Application Fees
Don’t just watch for exit fees from your previous lender – you also need to keep new establishment costs in mind when refinancing your home loan. Add up every single additional cost you could rack up and see whether you actually save money in the long run.
Paying Early – What Are the Fees?
You want to make sure that if your financial circumstances change for the better, you can make additional payments to your refinanced loan without incurring heavy penalties.
Can You Move Property?
Loan terms usually run for decades, but most Australian homeowners stay in a given property for an average of seven years. There’s every chance you will be doing the same, even if you don’t expect to.
Ask how moving homes will impact your loan – is it possible to transfer it to a new property? If so, what are the costs attached?
Other Loans? Time To Consolidate
Don’t forget that other debts can sometimes be added to the package – it may be worth doing this if you have outstanding high-interest loans, such as credit card debt.
Bundling these figures into a single refinanced package can save you a lot of money in the long run and can help you get your monthly outgoings under control. Loads of people decide to refinance for this very reason, but even if you’re not one of them, it doesn’t mean you can’t take advantage.
If your circumstances have changed or you’re not fully satisfied with your current lender, refinancing could be a great option for you and your family. Australian Credit and Finance has a team full of lending experts ready to help you come to grips with the nuts and bolts of refinancing your home loan.
You can contact the Home Loan Experts team at 1300 735 557 for a no obligation consultation. You’ll be taken through the entire application process and the free online pre-approval calculator can be used to calculate just how much you can borrow as well.