Refinancing made easy

October 17, 2016
Grace Cumbers

With interest rates still sitting at an all-time low, it's an excellent time to look at refinancing your current mortgage. 

Refinancing can reduce the amount of money you spend in interest across the life of your mortgage, and could save you thousands of dollars.

Before you dive in and get straight into refinancing, it’s important you know what you’re getting yourself in for.

This article aims to answer some commonly asked questions about refinancing, and help you work out if it’s the best option for you.


What is refinancing?

Refinancing is replacing your current debt obligation with another debt obligation under new and potentially different terms. It may allow you to extend the length of your loan, take advantage of lower interest rates and reduce your monthly mortgage repayments.


How much does it cost?

While refinancing does offer some serious benefits, it can be a costly process. It’s important you take time to weigh up the different costs and expenses involved before you decide refinancing is the right choice for you. Refinancing costs can vary depending on your circumstances. Everyone is unique.

Fees that may be applicable if you refinance include:

Borrowing costs: Some lenders will charge borrowing costs. These can include, loan application fees, valuation fees and settlement. Remember not all lenders charge these fees and some are happy to negotiate the price of them.

Lender’s Mortgage Insurance (LMI): LMI is usually applied when you need to borrow over 80% of your home’s value. LMI is not transferrable, and will need to be applied every time you borrow over 80% of the property’s value.

Exit fees may apply if you pay the loan out early, or break out of a fixed term.

Stamp duty may be payable when you refinance. This can vary depending on your location so your broker will let you know if it’s applicable or not.


Why should I refinance?

The most common reason borrowers decide to refinance is to take advantage of lower interest rates. With hundreds of products available, if you’ve had your mortgage for a few years there are high chances that there is a newer product that suits you better than when you first got your home loan. It’s important you take the time to check your credit before you decide to refinance, because you must have good credit to secure a better rate.


How do I know I’m getting the best deal available?

It’s important to calculate the total cost of refinancing, taking into account fees and interest rates. The interest rates can vary quite significantly lender to lender. It can get confusing – that’s where we come in to help you. Our team at Mortgage Choice Woolloomooloo can help navigate you through the wide array of products offered, and secure you a competitive deal on your home loan.


Give us a call on 02 9358 4855 or complete the contact us form in the top right corner to request a meeting time with one of our experts.

Posted in: Refinancing

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