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Your quick guide to refinancing

For many of us, the word ‘refinancing’ is enough to cause anxiety. Just the thought of going through the process may be off-putting, or maybe you’ve had a terrible experience in the past refinancing your mortgage. However, there are many experienced and trusted professionals who are ready and willing to see you through the entire process while making it as easy for you as possible.

There are many reasons you might decide to refinance your loan, but the most obvious one would be the better rates and packages out there that are more suited to your financial circumstance. According to The Australian Financial Review, locals are costing themselves an annual of $4.2 billion by not enquiring after a better mortgage rate.

While it is important to review your payment plan and financial provider, when you do it matters just as much. Timing plays a vital role as there are numerous factors you’ll need to consider before making any decision. Market health, life events, changes to your credit score, and equity movements in your property are some of the few things to think about as they can determine how effective your refinance is. This is where speaking to a mortgage expert becomes most useful. An experienced professional could you help you dig deeper (and smarter) into opportunities that you may not have considered before or explored further.

If you’re still reading, you may be wondering how and where to get started. Here are some crucial steps you can begin with:

  1. Review your current position
    Several years of routinely paying off your mortgage can set you on autopilot mode without you even realising. You might even have forgotten the details of your package such as fixed interest terms, monthly and annual fees, exit fees, and lenders mortgage insurance (LMI) rates. It would be advisable to thoroughly go through the ins and outs of your mortgage to know where you’re currently at and what you need to look out for.
  2. Determine your objective
    You’ve got your reasons to refinance your existing home loan, but what exactly are you looking for in the new loan? Do you want better benefits like an offset account or early payment fee waivers? Perhaps your financial situation has changed recently, and you want to lower your repayments? Whatever the reason, it is important to determine what you want out of this new loan before refinancing.
  3. Research, research, research
    With technology at your fingertips, it is so easy to get the information you need at the click of a mouse. While it’s handy to compare product benefits online, remember that what you see isn’t always what you get. Be sure to do a thorough research of different lenders on their website. The more you learn about what they can offer, the sooner you can narrow down your choices. An excel spreadsheet would come in handy to keep tabs on all the companies and website links you’ve researched if you need to reread the information later.
  4. Get professional advice
    It would be highly advisable to speak to a mortgage expert about refinancing your home loan even if you’ve done a thorough study of what lenders can offer. Brokers are experienced and have knowledge of the current market conditions that you might not have considered. You could be sparing yourself lots of time and trouble by engaging professional advice.
  5. Upgrade your package
    It pays to be consistent. If you’ve been maintaining a flawless repayment record over the years, then there’s a good chance your standing with the bank is much better compared to that of a first-home buyer. What this means is that your business may be more favoured by the bank, and they’d like to keep you around. Lenders will be more open to requests on customising standard products to suit you, which is a huge advantage when it comes to getting the best possible deal.

For those nearing the five- or ten-year mark of their loan, this is a good time to review your plan, get the facts, and familiarise yourself with what’s on the market. With the help of a mortgage expert, what seems like an overwhelming list of tasks can be straightforward, timesaving, and ultimately more beneficial to you in the long run.

FutureNow Finance can help you make the right decision when refinancing your home loan. We’ll do all the legwork and research our panel of lenders that will best suit your circumstance. Contact us today if you’d like to discuss your options at 1300 013 730 or email hello@futurenowfinance.com.au