Refinancing can be costly, so before you start chasing up cheaper interest rates or new loan features, do some basic math – find out if the benefits of a refinance outweigh the costs.
Weigh the costs of refinancing against the benefits
- To work out the costs of refinancing:
- Start by working out the exit fees on your current home loan
- Next look at the start up fees on the loan that you are interested in
- Add these two amounts together to find out the cost of refinancing
- Add up the amount you would save with the new loan by looking at the interest rate, fees and loan features
- Compare the amount you would save above against the costs of refinancing
Compare several quality home loan products
To ensure that all your bases covered, you need to compare the costs of refinancing across several quality home loan products. This means you need to:
- Know which home loan products in the market are of good quality
- Find out what the fees and charges are on any potential loan products
- Understand how you will benefit from the different home loan features
Ask a mortgage broker if a refinance is right for you
Get an experienced mortgage broker to do all the math and find out if a refinance is right for you. Their mortgage industry experience and knowledge means they are a step ahead and can help you choose a quality home loan product and even negotiate a better deal with your current lender. To find out if a refinance is right for you, ask your local mortgage broker by completing our brief online enquiry.
