Refinance Deals
As the financial world keeps changing because of fluctuating interest rates, more and better home loans with added features, and the ever present fear that more hard economic times might still be ahead, it is no wonder that home buyers are continually looking for better refinance deals.
There are many deals to be had on home loans, probably hundreds, but you will be most unlikely to be offered something for nothing. Everything comes at a cost, therefore the prudent home buyers looking around for better refinance deals are well advised to use their existing home loans as the base to compare all other deals against.
At what cost?
One of the first things to consider before anything else is the answer to the question, how much will this particular refinance deal cost?
By asking the question on how much will it cost, it does not necessarily mean how much the new home loan will cost on a monthly or overall long term basis, as it is presumed that you will be attracted to the new refinance loan because of some benefit being offered in this area. What is more precisely meant by cost is how much will it cost to get out of the existing mortgage and into the new one:
- Some lenders charge a hefty penalty before releasing you from the contract holding you to your existing mortgage.
- There will also be substantial stamp duty fees to consider particularly if you have increased the amount you are borrowing.
- There may also be an application fee, or start up fee to pay for the new loan.
All these fees and charges are in addition to conveyancing fees, solicitors costs and insurance. All need to be taken into account and weighed up against any benefit you may be getting from any finance deals you are considering.
Beware of an offer ‘too good to be true’.
Many home loans on the market today offer a special introductory low interest start up deal. When looking at this type of offer make sure you read the fine print thoroughly to find out what happens to the low interest rate when the introductory period expires. You may be tied into a contract where you will have to pay well above the market price over the balance of the loan term.
If you are considering a refinance deal that will allow you to change to a fixed interest rate home loan make sure you are reading the trend properly and be satisfied that you will be taking out such a loan because you feel interest rates are rising or expected to rise in the future. If it happens that interest rates drop you will be stuck with a fixed interest rate loan fixed at a higher rate than you would otherwise be having to pay.
The best refinance deals may not necessarily mean you have to go to another lender.
It can be a bit like ‘the grass being greener across the fence’. When asked if your home loan can be improved to better suit your present needs your present lender may be able to offer you a better deal than other lenders who you don’t know and have never had any previous dealings with.
It is worth remembering that your existing home loan is not actually set in concrete and your present lender may have the ability to make changes to better meet your demands, rather than have you go to another lender.
If this can be achieved you will have got what you wanted without having to pay any of the hefty fees involved in taking out a completely new loan.
Consider more regular payments to shorten the term of the loan.
A further consideration worth evaluating before taking the rather big step of changing to a new mortgage document altogether is to consider taking on a different payment schedule.
Rather than persisting with the minimum monthly repayment that most home buyers do, consider the benefits of making payments on a weekly or fortnightly basis. This approach can have you paying off the loan much quicker if that is what you are trying to achieve. You may also benefit by having your lender allow you to pay extra money into your loan on special occasions such as when in receipt of tax refunds or bonuses etc.
If you are looking for more information on refinance deals you are welcome to contact us at any time.
Related posts:
- Refinance Your Home
- How to Refinance
- Best Home Loan Deals
- Home Loan Refinance Rates
- Refinance your Home Loan or Switch to Bankwest
- Best Refinance
- Top Mortgage Deals
- No Closing Cost Refinance
- Cash Out Refinance
- Best Refinance Company
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