I'm continually counseling my clients about their alternatives when it comes to refinancing their home loan, but before you leave and refinance your loan through 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 benefits ?
Every decision we have in our lives comes back to the age old question of "what's in it for me ?". For you to be studying a refinance, there must be some plain benefit for you in some shape or form. You'd trust to profit by either getting your repayments decreased (which would free up some much need cashflow), a lower interest rate or a much more active loan structure. The primary benefit of a refinance for most of my clients is to get all of their greatest debts under the one roof. This leaves them with just the one, low simple repayment to worry about and some well earned peace of mind !
2. Is my broker licensed and seasoned ?
Most legitimate brokers in Australia should be certified with the MIAA, FBAA and hold accreditations with a large number of loaners. The longer your agent has lasted in the home loan industry, the greater his or her knowledge base. The more seasoned your broker results in a cleaner, painless process. As a mortgage broker gets experience, their knowledge of what deal is best suited with what bank increases.
3. How long will I be in the place for ?
If you are only contriving to stay in the property for a relatively short period (a year or two) then you would want to miss any loans that charge early payout/discharge fees as well as any loans that confine you into an uncompromising fixed interest rate. If the place is a short term deal, then I'd advocate considering an equity styled loan which really gives you a tremendous amount of tractability and freedom. If you are designing on being in the property for the long term then you want to find a loan that has low interest rates and very few account keeping fees.
4. How will refinancing impact my credit rating ?
Everytime you hit up for credit with a lender, they'll set a credit check on you (usually with Baycorp Advantage). The credit check itself leaves an enquiry on your credit file, but these enquiries does not affect your credit rating whatsoever. As long as there isn't an excessive amount of queries listed on your file, no alarm bells will be set off.
5. Should I get independant coaching ?
When getting a loan, you are supplied with a set of bank documents to sign when the loan has been approved. When signing your bank documents the loaners urge that you sit down with your finance agent or bank officer to explain incisively 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 resolve any wonders you may have.
I hope that you are able to take something away from reading these 5 assistive and handy tips on refinancing. I've also just included 2 other points which will help you in the long run !
A few more reasons to refinance your home loan are:
- To shift over to an Equity Loan: You want to refinance your loan to pull cash from your home's equity for debt consolidation, home improvements, investments or other uses.
- Paying Off Your Mortgage Earlier all relates to the fact that you ramp up your equity in your home quicker and pay off your loan earlier by refinancing your mortgage loan onto a more efficient and effective structure that really gets your money working for YOU and NOT the banks!
Not bumping anything of your home loan? Afraid about what should be required when getting mortgage refinancing
? Check our sound analysis on the illusions that the banks play at mortgagereductionexpert.com.au/debt/
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