Should you refinance?
Many people are paying too much interest on their mortgages but are unsure whether it is worth refinancing. Or they simply don’t want to go through all the hassle for the sake of what seems like a small saving.
The truth is that refinancing can mean significant savings in repayments.
Mortgage brokers also refinance loans for reasons other than lower interest rates: they might want to get better service for their clients, a more suitable loan structure, or a deal that is better suited to their client’s changed circumstances.
In today’s competitive mortgage market we are often able to save our clients at least half a percentage point in interest.
This can add up to tens of thousands of dollars over the life of a loan.
|What about the hassle and the mountain of paperwork?
It’s true that most lenders require what seems like a ridiculous amount of personal and financial information to process a loan. The secret is to have a professional broker working with you to help sort out all the documentation, explain the process and make sure that you are getting the best possible deal.
If you’re thinking about refinancing make sure it will be worthwhile. Here’s a simple checklist to help you weigh all the pros and cons. Be sure to ask the following questions.
And don’t just ask the questions. Make sure you get the answers.
1. What are the application / establishment fees on the new loan?
2. Is a valuation required on your property? How much does this cost?
3. How do the interest rates compare? Should I split the loan and have part of the loan on a fixed rate and part of the loan on a variable rate?
4. What features or benefits are available with the new loan? The benefits could include an offset account, salary crediting, principle reduction etc.
5. What are the ongoing fees and charges?
6. What are the Government fees and charges? Remember that you don’t have to pay mortgage stamp duty when you refinance.
7. How much paperwork will I need to fill out? How long will this take?
8. Is the new lender someone who will help me out in the long run?
9. And the all important question... how much will I save in total?