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Ready To Refinance Your Home Loan?

Gone are the days where home buyers stayed with their original lender for the duration of their home loan. Many now shop around for lower repayments, a lower interest rate, more loan options or better service.There can be many benefits to refinancing your home loan, but it’s important to look at your situation carefully and to clearly compare possible benefits and disadvantages.Typical reasons for refinancingYour home loan may no longer be the one that’s best for you, especially if your needs have changed since taking it out. Or you may want to consolidate other debts (like credit card balances, car finance or personal loans) by borrowing against the equity in your home. Secured property loans generally charge lower interest rates so you can reduce your total monthly repayments.If you previously paid a premium rate through not meeting normal lending criteria, your situation may now have improved and you could save interest by switching to a standard home loan.Alternatively, you may not be happy with the service or loan access options you are currently receiving. Rate competitiveness and fees are a major factor. You may be able to get a more competitive deal from another lender.What will refinancing cost?Check what your present lender will charge for breaking your agreed loan term and what discharge costs apply. What will your new lender charge to establish your home loan? Their costs will include a revaluation of your property as well as loan settlement costs.Mortgage stamp duty and registration fees don’t usually apply when refinancing your home loan, but be sure to check. And if you want to borrow more than 80% of your property’s value, you’ll need to pay Lender’s Mortgage Insurance. This could be considerable so again be sure to check.Who offers the best deal?If you’re happy with your present lender’s service, discuss your home loan needs with them first; they may be able to help and you may eliminate discharge and establishment fees.For information about other lenders, check out the Internet, home finance magazines, newspapers or phone and visit potential lenders direct.What about the paperwork?Refinancing your home loan does involve some time and effort to ensure you get the best new loan for your needs and minimise your costs.You’ll need to get your supporting documentation together, to confirm your income, your repayment history, property details and so on. An organised approach will make the whole process much easier with a lot less stress.

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