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As per the guidelines stated in The National Consumer Credit Protection Act, 2010, mortgage brokers have been instructed to ensure that the loan contract is ‘not unsuitable’ for the borrower. In this context, you may often wonder that what exactly makes the best-suited refinance deal for you!

What Makes the ‘Best Refinance Deal?’:

Well, in simple terms, it is a deal that meets your precise requirements, without you having to face any financial hardship! It will allow you to enjoy a cheap rate of interest so that you can pay low repayments, whilst offering you the benefit of flexibility, so that you can exercise complete control on your mortgage!

Features such as redraws, offset account, extra repayments, and portability, help you in managing your loan in just the way you want! For instance, if you have extra money, you can make additional repayments to your mortgage without undergoing any penalty. Again, if you are in dire need of cash, say, for medical expenses or tuition fee for children, you may redraw from your account to meet your urgent expenses at no extra cost. If you’re moving to a new property, the portability feature will enable you to transfer the loan from one house to another. An offset account can assist you in saving thousands of dollars as well as take years off your mortgage.

Of course, the term ‘best’ is relative in nature, and it largely depends upon one’s personal & financial circumstances. However, before taking the plunge, look for answers to the following questions, as these would help you in attaining your objective of bagging the best deal:

  • What type of loan do I require? Fixed rate, variable rate, or split rate?
  • What is my sole purpose of opting for a Refinance? Lifestyle Change, Lower Rate of Interest, Renovation of House, Buying a Second Home, or Consolidation of Debts?
  • Which are the features I need? Additional Repayments, Free Redraws, Offset Account, Portability?
  • Will there be a change in my lifestyle in the near future?
  • What are the costs of refinancing? Do I need to pay an exit fee? What will be the upfront costs charged by the new lender?
  • What will my savings be if I refinance?
  • Will the savings outweigh the costs of refinancing?
  • What is the value of my property? Is the LVR below 80%?
  • Is the balance amount too small?

How to Compare Home Loan Rates Major Banks & Non-Banks

The key to securing a great deal is to conduct a research and make relevant comparisons! You need to shortlist the suitable mortgage products, compare home loan rates, costs, & features, and finally arrive at the best-suited product for your borrowing needs and lifestyle requirements. Here’s a quick overview of how to go about the procedure of comparing mortgage products:

Rate of Interest

The interest rate plays the most important role in determining your amount of repayments and subsequent savings in money. Each lender, be it a bank or non-bank, offers a different rate, and thus making it all the more essential to conduct a thorough research on the available rates. Also, before starting the research, you need to decide whether you want a fixed, variable, or split rate. If it is a fixed rate that you desire, you need to decide for how long you want to keep the rate fixed. With the help of a compare home loan rates calculator you can compare the rates offered by various lenders and analyze their effect on your repayment amounts.
You may look to refinance your loan for a variety of reasons. Accordingly, you also need to look for features that will help you in achieving your personal & financial objectives. Make a list of all the specifications you require in your new mortgage. For instance, if you wish to keep your loan maintenance costs at a minimum, you should compare only those products which do not demand any ongoing fee. If you are confident that there will be an increase in your sources of income in the near future, it is a good idea to compare home loan rates big four, which allow you to make extra repayments without any penalty.

Costs of Refinancing

When you opt for a refinance, you may need to incur some costs in terms of application or establishment fees, valuation fees, monthly & annual fees, and other upfront and ongoing expenditure. Not all lenders charge these fees. Again, the rate may vary from one lender to another. Compare the rates of all such costs that are applicable to your new loan and analyze their long-term impact on the total cost of refinancing.
Facilities & Customer Service
Another aspect worth-considering is the additional facilities and customer service rendered by your new lender. Are they offering a direct debit option for repayments? Are there any package discounts on offer? Is there any hidden cost?

How to Secure the Best Deal

Securing the best deal calls for a lot of forethought, research, planning, and excellent negotiating skills. Let’s have a look at the steps involved in bagging the best funding option:

Refinance does not always imply looking for a new lender. You may also refinance your mortgage with your existing lender. In fact, it is the first step to zero in on the best deal. You can negotiate with your existing lender for providing you with a feature-rich loan at a cheaper rate of interest.

In situations, wherein changing your lender seems to be the ideal option, you need to shop around for products that suit your borrowing needs and personal circumstances. Remember, that even a small variation in rate, say 0.5%, can help you save thousands of dollars in the long run. Hence, it’s imperative to look for products that offer a lower rate of interest, while enabling you to enjoy plenty of facilities that revolve around your unique needs.

While each lender may have some specific requirements, there are certain generic criterion too, such as, loan-to-value ratio, sources of income, deposit amount, and more. Before moving forward, you need to assess whether you meet these generic requirements. If not, then perhaps, you can take steps to improve your financial condition, so that you can easily get qualified for a refinance mortgage.

While assessing your eligibility, you also need to evaluate your credit file to look for missed or incorrect entries. A good credit history ups the chances of getting a better rate of interest.

When taking a refinance loan, you need to pay fees for closing the loan as well as opening up a new account. You will need to calculate these costs and ensure that they are set off against the savings you will make throughout the term of the mortgage.

There is no denying that carrying out the above-mentioned steps is time-consuming and complicated. A mortgage broking expert can be of immense help for conducting comparisons and negotiations with lenders. At times, mortgage brokers also have access to products, which are not available otherwise.

How to Ensure That the Loan Suits Your Lifestyle Requirements

Each stage in life brings with it its own unique set of opportunities and challenges. Listed below are the features which are beneficial for each of the life stages. Opting for these will ensure that you meet your basic lifestyle requirements:

For young borrowers

  • Portability
  • Redraw
  • Extra Repayments
  • Standard, variable, or fixed rate loans

For middle aged borrowers

  • Redraw
  • Offset account
  • Package home loan
  • Line of credit loan

For borrowers about to enter the retirement stage

  • Low fees
  • Option to access home equity
  • Line of credit home loan

For retired borrowers

  • Redraw
  • Option to access equity
  • Line of credit home loans

How Does Refinance Today Help You in Zeroing On The Best Deal?

As mentioned earlier, a mortgage broker can be of great help in achieving your objective of acquiring the best funding option! We, at Refinance Today, mange all the legwork, provide you with expert advice, and lead you to your destination much sooner than you could imagine!

Here’s how we serve as your ally in your journey:

  • We meet with you face-to-face at your convenient time and location to understand your needs, provide you with personalized answers to your queries, and work out your borrowing capacity.
  • We compare home loan rates across myriad products and lenders, and shortlist the best aussie home loans for you.
  • We assist you in filling up the forms, submitting them, and liaising with the lender on your behalf.
  • We are always there to assist you, even long after you’ve settled your loan.