According to recent research, 59% of Australians face financial anxieties through day and night. This could be due to a myriad causes, with mortgages as one of the main sources. If you’re one of them, then you’ve come to the right place. We’re here to help you by discussing crucial points regarding refinancing.
Refinancing can help you regain your peace of mind and help you start afresh. You’ve reevaluated your financial status, set goals and objectives, and now it’s time to see results. Before you go in, be aware of certain crucial stumbling blocks to avoid.
Read on as we discuss these top five refinancing mistakes to watch out for.
Refinancing Mistake #1: Strictly Focusing On Interest Rates
We all know that every consumer gravitates towards lower prices. This is why it comes to mortgages and refinancing, a lower interest rate can be very appealing. However, there may be additional fees and charges that raise this enticingly low figure. As a result, all Australian lenders must show comparison rates alongside their own interest rates.
For this, you must also be certain of rates for mortgage discharge or cancellation, rates for a fresh (new) application, stamp duty, and lender’s mortgage insurance (LMI) fees.
Refinancing Mistake #2: Miscalculate Fees
If you have a fixed-rate contract, the break cost might be thousands of dollars. Request a break loan estimate from your present lender that includes the cost of early payback. When comparing this to the interest rates on a new loan, you may be able to make a more informed decision.
Refinancing Mistake #3: Not Being Strategic with the Market
We understand that interest rates will change. However, it is unclear how regularly or how frequently this will occur. You could speculate on interest rates by watching them rise or fall, but why wait when you can save now? Loan comparisons are a great method to find out how much money you could save.
Refinancing Mistake #4: Not Looking for the Best Bank Deals
Brand loyalty could be a barrier to refinancing. Some of you may have banked with the same institution for many years… However, familiarity can mask a new bank’s competitive advantages. You should look around for the best deal, just like you would with any significant purchase. In this case, a change is as wonderful as a vacation.
Refinancing Mistake #5: Refinancing amid Economic Downturns
When your financial condition is steady, it is better to refinance. The better your credit history and debt-to-income ratio, the better your chances of qualifying for a competitive rate. Then, rather than refinancing to fix a financial problem, refinance to give you and your family more money to spend on things you enjoy.
Conclusion
Now that you are finally aware what to do and what not to do, you can confidently set financial goals without ever losing sleep again! Once you feel that you are ready for the next step, don’t hesitate to reach out to a professional. This way, you can make further decisions based on guided information.
Are you looking for mortgage refinancing services in Perth? All of the Finance Managers at FinanceCorp are fully qualified, trained, and experienced mortgage professionals who live and breathe finance. With us, you’ll achieve your dreams and buy a home with zero apprehensions. Enquire today and get a better loan!