The ins and outs of refinancing
The home finance environment evolves constantly so different options, rates and add on's become available all the time. Our personal situations are also changing often so it makes sense for clients to review their home loan now and again to see if an option with greater flexibility, beneficial extras or a lower interest rate has become available.
Some reasons to refinance
There are many reasons someone might look to refinance their home loan. Some examples include:
- To save money with a better interest rate or lower fees or to get new features such as flexible repayments, redraw facilities and account splitting
- To access equity for home renovations or to invest elsewhere (which in some cases may offer tax benefits)
- To get a loan more suited to their changing needs such as starting a family, buying or selling an investment property or changing jobs
- Consolidating debts into their home loan to save on interest and to simplify repayments
- Exploring options toward the end of a fixed rate term.
When clients should refinance their home loan
This one is quite simple. When a home loan that better suits their needs becomes available or will assist them pay off their mortgage and own their home faster, that's when it's time to refinance. The tricky part is knowing when these opportunities arise - this is where I come in.
With a competitive home loan environment and plenty of lender marketing there always seems to be cheaper options out there. It's essential however to look at costs beyond the interest rate. It's important to compare because the cost of refinancing, ongoing fees and home loan product add on's can mean a new, seemingly attractive offer can actually be more expensive in the long run.
Meeting with me regularly will ensure clients' always have the right loan for their current needs and their future goals.
What's involved in the refinancing process
Firstly, client's should meet with a mortgage broker when their situations change or if they haven't reviewed their home loan in over a year. I can review their situation and compare over one thousand loans to see if there is a better suited option for them now.
If refinancing is the right option, the application process is similar to a regular home loan application and I can do most of the leg work for them.
Once the new home loan is approved by the lender, the approval documentation, including any special conditions, will be sent to the client to accept and return. The repayment and discharge of the existing home loan will be arranged by the lender and the new home loan will be in place for the client.