Mortgage refinance
You can get a better deal on your home loan with a
mortgage refinance.
Choosing to refinance your mortgage means you already have a mortgage but you would like to transfer your loan to another product with the same lender or another lender altogether.
To arrange a
mortgage refinance, the most common steps are:
1. Research a better deal on a home loan, which you can do at a mortgage auction website such as
BidMyLoan, the only website in Australia where you can fill out one online application form and lenders will compete for your loan.
2. Sign up to your new mortgage, which includes negotiating a good rate and finalising paperwork.
3. Pay out your old mortgage with the funds from your new mortgage, which is typically arranged for you by your new lender if you end up switching lenders.
Why would you choose a
mortgage refinance?
Popular reasons for a mortgage refinance include:
- Switching to a variable interest rate from a fixed mortgage, which will allow you to make extra repayments without penalty.
- Switching to a fixed interest rate from a variable mortgage, which can help you to lock in a low interest rate.
- Consolidating debts if you hold several home loans such as variable, equity and line-of-credit loans.
- Accessing extra funds for a major home renovation.
However, be aware that you may be charged fees during a
mortgage refinance such as:
- Establishment fees charged by your new lender for your new loan.
- Valuation fees, which your new lender may charge you when they value your home to confirm that you have enough equity to borrow your desired amount.
- Exit or discharge fees, which your existing lender will charge you for leaving them as compensation for the loss of your business. It’s important to read the fine print in your new loan to check any future exit fees you will be obliged to pay.
- Lender’s mortgage insurance, which you typically need to pay if you borrow more than 80 per cent of the value of your home.
A
mortgage refinance is a sensible way to save on mortgage repayments, but it might not always be the best option for you. If you cannot obtain approval on a new loan with another lender, interest rates in the market are at an all-time high or the exit fees with your existing lender are exorbitant, you may choose to remain with your current lender.
To find out if a mortgage refinance is the right step for you, go to a mortgage auction website such as BidMyLoan
, where you only need to fill out one application form and you will receive responses from various lenders with competitive home loan packages.
For more information about a mortgage refinance, go to bidmyloan.com.au or call 1300 BID MY LOAN.
This article was brought to you by BidMyLoan, helping first home buyers, refinancers and investors find a better home loan in Australia.
