Home Loan Refinance Tips!
Refinancing your home is a big decision that a lot of Australians consider throughout their home loan journey.
There are some costs to consider and you really need to take a long-term view of your individual scenario before signing on the dotted line.
In some instances, the upfront costs could easily be outweighed by the possibly thousands of dollars you'll save in interest and fees over the life of the mortgage if you choose the right home loan refinance solution.
Here are some tips to consider making sure that you get the most out of your home loan refinance.
- Avoid sending loan applications to multiple financiers in hope that one will say yes. This is likely to reduce your credit worthiness and chances of being approved for your home loan refinance.
- Make sure the lower interest rate being offered is for the life of the mortgage and not just a honeymoon rate that reverts to a higher than normal rate after a certain period.
- Make sure you can make additional repayments to your mortgage without being hit with additional fees and charges.
- Compare all the costs of any new mortgage, not just the headline rates. Most mortgages have different application fees, ongoing fees and exit fees.
- Consider a light option mortgage which will give you the basic features that you need, not the home loan refinance with all the bells and whistle that you'll likely not take advantage of over the home loan term.
- Using comparison rates to compare different mortgages can help because the comparison rate will take into consideration other costs associated with the mortgage such as regular fees and not just the interest rate.
- In working out your loan affordability, factor in potential further rate increases so that you are prepared for increases to your minimum repayment amount in the future.