Mortgage Refinancing in Newcastle

April 30, 2013
Richard Windeyer

If you’ve had a home, business and/or personal loan for some years, and your financial circumstances have changed since you first signed on the dotted line, your loan could be ripe for mortgage refinance.  

Refinancing or switching generally refers to the process of replacing your existing loan with a new loan from the same or a different lender.  

It makes good financial sense to check if your existing home loan offers a competitive interest rate, charges minimal fees and offers useful and value-for-money features suited to your lifestyle and needs. It is important to do your research and way up the pros and cons before making the decision to move.  

So, before taking steps to replace your existing loan with a new offer, consider my eight step checklist to refinancing.  

  1. Head into the decision knowing why you want to refinance. Borrowers should have clear reasons in mind as to why they want to refinance. This will likely make a difference to the type of loan you refinance to.
  2. Weigh up the cost versus benefit of refinancing. Research the decision to refinance by weighing up the overall costs versus the benefits. For example, borrowers should factor in possible costs such as application fees, lenders’ mortgage insurance, mortgage registration fees, break costs, etc. Once you have researched your loan options, it is not uncommon to find that the right loan for your needs and circumstances is in fact your existing loan. 
  3. Take the time to shop around. Make time to do some of your own research and compare your home loan to other loan options currently available in the market.
  4. Don’t dismiss smaller, lesser known lenders. Keep in mind many smaller lenders such as credit unions and building societies also offer competitive deals in terms of interest rate and the available features and fees charged.  
  5. Interest rate is not everything. A home loan’s interest rate is only one factor to consider when refinancing to a ‘cheaper’ home loan option. It is just as important to weigh up other loan factors such as the loan’s fees, features and flexibility. 
  6. Have a realistic expectation of your property’s current market value. If you’re looking to access your equity to renovate, purchase other assets, etc., be sure to have a realistic estimate of your property’s current market value.
  7. Know that changes in your financial situation can impact on your borrowing ability. If your financial circumstances have changed since you took out your existing loan (for example you have started a family and moved from two incomes to one or you have taken on additional debt), you may find that a lender won’t approve you for the same loan amount. In these situations it is a good idea to be upfront with your mortgage broker or lender and to provide any documentation to explain the changes, especially if they are temporary.
  8. Be prepared to submit new loan documentation. Every time you apply for a home loan you will likely need to submit a range of paperwork to show evidence of your current income, expenses, assets and liabilities. To ensure a smooth loan application process, it is a good idea have all the necessary paperwork on hand.  

For more information contact Richard Windeyer on 1800 01 LOAN or click here to "Book a Meeting"

Posted in: Refinancing

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