5 Facts To Consider When Mortgage Refinancing
I’m continually counseling my clients about their options when it comes to refinancing their mortgage, but before you go away and refinance your loan over another 25 or 30 year term there are 5 key points for you to view, and I’ll share these with you.
What are the gains ?
Every conclusion we have in our lives comes back to the age old question of “what’s in it for me ?”. For you to be taking a refinance, there must be some apparent profit for you in some shape or form. You’d desire to benefit by either having your repayments decreased (which would free up some much need cashflow), a lighter interest rate or a much more active loan structure. The great gain of a refinance for almost all of my clients is to get all of their unpaid debts under the one roof. This results them with just the one, low smooth repayment to worry about and some well earned peace of mind !
2. Is my agent licensed and experienced ?
Most legitimate brokers in Australia should be approved with the MIAA, FBAA and hold accreditations with a large number of loaners. The longer your agent has been in the mortgage industry, the more improved his or her knowledge base. The more practiced your broker results in a smoother, pain-free process. As a mortgage broker develops experience, their knowledge of what deal is best suited with what bank increases.
3. How long will I be in the property for ?
If you are only preparing to remain in the property for a relatively short time period (a year or two) then you would want to miss any loans that bill early payout/discharge fees as well as any loans that corner you into an uncompromising fixed interest rate. If the house is a short term buy and sell, then I’d advocate looking at an equity styled loan which really leaves you a tremendous amount of flexibleness and freedom. If you are planning on being in the place for the long term then you want to source a loan that has low interest rates and very few account keeping fees.
4. How will refinancing hit my credit rating ?
Everytime you hit up for credit with a lender, they’ll do a credit check on you (usually with Baycorp Advantage). The credit check itself gives an enquiry on your credit file, but these enquiries will not affect your credit rating whatsoever. As long as there isn’t a large amount of queries listed on your file, no alarm bells will be set off.
5. Should I get independant coaching ?
When obtaining a loan, you are issued with a set of bank documents to sign when the loan has been approved. When signing your bank documents the lenders advocate that you sit with your finance broker or bank officer to explain precisely what they mean. If you are in need of any advice regarding your documents, please don’t hesitate to meet your mortgage broker, accountant or lawyer as they will be able to walk you through them and answer any wonders you may have.
I hope that you are able to take something aside from reading these 5 helpful and handy tips on refinancing. I’ve also just included 2 other points which will help you in the long run !
A few more grounds to refinance your home loan are:
- To shift over to an Equity Loan: You want to refinance your loan to draw cash from your home’s equity for debt consolidation, home improvements, investments or other uses.
- Paying Off Your Mortgage Sooner all relates to the fact that you ramp up your equity in your home speedier and pay off your loan earlier by refinancing your mortgage onto a more capable and effective structure that actually gets your money working for YOU and NOT the banks!
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