For most people the thought of refinancing is triggered by comparing your current interest rate with what might be available elsewhere and in itself that’s a reasonable proposition, but keep your eyes and ears open to make sure you get the full picture. Here are some of the things you need to consider.
First and foremost if you currently have a fixed rate make sure you take in to account any potential break costs that might apply. Depending on a number of influencing factors these break costs can run in to thousands of dollars. Only your current lender will be able to give you an estimate of the amount involved.
Secondly, if the amount you want to borrow exceeds eighty percent of the valuation of your property you will be liable for Lenders Mortgage Insurance. Whilst you might have Lenders Mortgage Insurance on your existing loan this is not transferable to the new lender so their could be additional costs of thousands of dollars.
Thirdly, get a written quote of all your discharge costs from the current lender and all your ingoing costs from the new lender or broker. And ask that lender or broker to show you how you will be better off with the refinance.
Or, of course, give us a call and we’ll do all the numbers for you and help you decide.
Australian Credit License No. 377093
