Refinancing
Many people start to think about refinancing when interest rates or their personal circumstances change. If you are refinancing for what looks like a better home loan, the most important thing to consider is the long term benefits against the actual costs of refinancing.
Points To Consider When Refinancing Your Home Loan
The main points that you need to consider before refinancing your home loan relate to your motivation.
- Check on exit or deferred establishment fees that you will be required to pay when you switch loans.
- What are the establishment fees on the new loan and are there any deals on at the moment?
- If you are refinancing to a fixed loan or a honeymoon loan, find out what the repayments will be once the interest rate reverts.
- If you are refinancing to access equity, make sure that you have done your sums correctly on your needs and that there is enough equity available in your property to go ahead.
Some other questions you might ask yourself:
- Am I satisfied with the performance of my lender?
- Am I happy with the interest rate I am paying?
- Are my home loan repayments manageable?
- Does my home loan allow me to live my life the way I want to?
- Do I have all the home loan features I need to make paying off my home loan easier?
- Am I using all of the home loan features I am paying for?
- Has my home loan adapted to any lifestyle changes? For example have you retired, changed jobs, had a baby or have your children moved out?