When you take a home loan, you surely are aware that it will take a considerable amount of time to pay out the mortgage! However, like every other product in the market, home loans also come with new features and prices every year. Again, your financial situation may also not be the same like it was a few years back! Considering this scenario, if you explore the market, chances are that you may secure a better deal with improved features and lower rate of interest that perfectly suits your current lifestyle!
You might have bagged a competitive deal when you first took a mortgage, but that doesn’t necessarily mean that you need to stick to that same product or lender throughout the term! This is where Refinancing comes into the picture.
Refinancing home loan can help you save a substantial amount of money, whilst ensuring that you enjoy great features that revolve around your financial goals!
Why Refinance Home Loan?
There are several reasons why refinancing may turn out to be the ideal option for you:
- With a lower rate of interest on your new loan, you can surely save money in the long run
- Secure a competitively priced mortgage and pay only for those features which you actually need
- Avail more flexibility in terms of repayments by making additional repayments at no extra cost
- Enjoy repayment holiday if you experience a change in your financial circumstances
- Link your savings account with the loan
- Redraw additional repayments in emergency situations
- Take advantage of the loan portability feature
- Switch from a fixed rate loan to a variable one and vice versa
- Save dollars by embracing the refinance home loan debt consolidation approach
- Achieve your most urgent goals by utilizing home equity
What are the Costs?
Of course, there are some refinancing home loan costs involved. It is always advisable to ensure that these costs are outweighed by the savings you make on transferring your existing loan to a new one. These costs are mostly negotiable in nature and may vary from lender to lender. Moreover, not all of them are mandatory.
Here’s a run-up of some of the costs which you may have to incur while making the switch:
Account opening fee
These may include, Loan application Fee: For applying for the new loan Valuation Fee: For getting the property professionally valued Settlement Fee: For paying out the existing mortgage Stamp Duty: For the new mortgage
Lender’s Mortgage Insurance
This is applicable in scenarios when your new loan accounts for 80% or more than the home’s value. Lender’s Mortgage Insurance safeguards the lender in cases of default of loan repayments.
Exit Fee/Early Repayment Fee/Deferred Establishment Fee
The current lender may levy an exit fee, particularly, if you’ve had the mortgage for a period less than five years.
Break costs may apply if you have a fixed rate loan.
Mortgage registration fee
While transferring your home loan, the State Titles Office may ask you to pay a mortgage registration fee so that they are aware of the amendments made in terms of the type of loan and the lender. This fee will depend upon your State or Territory.
Things to Remember While Refinancing Home Loans
Here are some refinancing home loan tips, which will ensure that you choose the finance option which is right for you, your current circumstances, and lifestyle requirements:
- First thing first! Carry out a proper research to ensure that the lower rate of interest is applicable for the entire term of the mortgage and not for a brief period of time, only to revert to a rate which is higher than the normal!
- Explore all the finance options available and conduct comparisons across price as well as features. Make sure that you pay for only those features that are useful for you.
- Ensure that your mortgage allows you to make additional repayments, so that if you want, you can pay out your loan faster!
- While calculating your loan affordability, consider inflation and a potential increase in rate, so that you are fully prepared to pay the increased amount of repayments in the future.
Can I Refinance if I Have a Bad Credit?
At times, due to unavoidable circumstances, such as losing a job or encountering an illness, one may find it difficult to keep up with the loan repayments. Nevertheless, that does not imply that you cannot apply for a refinance. Refinancing home loan with bad credit depends upon your income and nature of the bad credit.
Here are some tips for securing a loan, even if you have a bad credit:
- Look out for specialist lenders who offer loans to people with an impaired credit history. There are a number of them in Australia. However, they may have some criterion for accepting the loan, such as a deposit of 10%.
- Search for means of saving a deposit. This may include finding a new source of income or cutting down on your expenses.
- While bankruptcy may be difficult to repair, you can surely do something about paying back late repayments and defaults, thereby fixing your bad credit history.
- Formulate a budget which would reflect the source of income, savings history, and expenditure. This will help you to understand your loan affordability.
- Before approaching the lender, assess your financial situation, by getting a copy of your credit report. Ensure that there are no mistakes or incorrect entries, such as an overdue bill for which payment was made on time.
- Be truthful about your credit history. This will help you in getting the best suited product for your financial circumstances. Generally, lenders tend to be more considerate, if your bad credit was triggered due to an uncontrollable life event.
- Mention the accurate figures of your income, expenses, assets, and liabilities, in your application form.
How Can Refinance Today Help You?
RefinanceToday is Australia’s preferred destination for refinancing home loan at cheap rates of interest and with enhanced features. With a proficient team of mortgage professionals and a rich line-up of lenders, we, at RefinanceToday can help you come closer to your dream of owning a house in Australia.
When you’re ready to speak about refinancing, we can help you with:
- Evaluating your current financial situation and suggesting ways to improve it
- Assessing your bad credit history and advising on how to fix it.
- Assisting you in consolidating your debts.
- Finding that perfect loan for you in terms of lower interest rate & fee and better features.
- Guiding you through the application, approval, and settlement processes.
Know Your Borrowing Capacity with Our Refinancing Home Loan Calculator
With us, knowing your borrowing capacity is simple and quick!
All you need to do is to visit our website and input the details in the calculator and you shall get an estimate of how much you can borrow!
You can also get an idea of the amount you can save by making the switch to a new lender or a new loan product!
Refinance Today Makes the Switch Easy and Hassle-Free!
At RefinanceToday, we are fully capable of helping Australian home owners to undergo an easy switch from their existing loan to a new one! By keeping customer-centricity at the heart of all our activities, we cater to the diverse needs of our clients and provide them with the best possible solutions & support.
Here’s how we ensure a hassle-free switch:
- Negotiating with lenders on your behalf.
- Meeting you at your preferred place and time.
- Managing the entire paperwork and settlement.
- Comparing prices and features across a host of loans and lenders.
- Interacting with specialist lenders in cases of bad credit history
Just let us know what you’re looking for and we shall do our best to help you achieve your goal!