Interest rates are at record lows, with rates below 4% now expected. This has home owners and investors lining up to refinance their mortgage loans.
Are you in a financial position to refinance? If so, take the time to do it right. Avoid the temptation to simply re-write what is in place. If you have been thinking about doing it why are you waiting? Note 5 common mistakes to be aware of and avoid:
1) Error number one is waiting until you are doing it tough before looking at trying to save on the mortgage. You should refinance in the good times to prepare for the bad times. You may have heard the saying “Banks are only happy to hand out a loan if you do not really need it”. That is more true than funny. Use the good times to plan ahead. If you can comfortably afford to pay the high rate, we can comfortably position you into a better rate.
2) Automatically refinancing with your current bank without shopping around ignores the competitive environment. First preference for any person is to maintain their primary banking where it is, however why do this without considering the alternative? A mortgage broker will do the comparison work for you, negotiate the best possible deal, and give you the choice of available options. That may result in your broker arranging a better deal at your existing bank, or you may decide to move, and take your good credit history with you.
3) Rate is not everything. Fees and charges, upfront and ongoing, must be taken into account. Honeymoon rates which revert to a higher rate after an initial introductory period add to the complexity. Some offers which sound too good to be true are that good, others have hidden traps. It is not easy to fully understand the hidden detail, you need an expert you can trust investigating and explaining it to you.
4) Waiting for interest rates to drop / start going up. From a market timing perspective, refinancing to a better rate is a bit like buying property, the best time to do it was yesterday. If refinancing is appropriate for your individual circumstances, then do it now, do not procrastinate.
5) Ignoring other important considerations. Refinancing is not just about loan costs. There are many other life issues to be considered. Your situation is unique, individual credit advice is essential, take advantage of the professional broker services available. Remember they come at no cost to you.
Integrity Finance Australia– Changing Lives
Daryl Borden, your Dingley Village Mortgage Broker, Ph. 03 9511 8883 ACL 392184