Refinancing involves changing your home loan from your current lender to a new lender or restructuring your loan or loans with your current lender. Many of the clients who refinance do so for many reasons:
- Seeking a better home loan offering in terms of rate and/or fees,
- Not happy with the service of their current lender,
- Would like to restructure to a loan that is more suitable to their current needs,
- Move up to a standard loan from a previous low doc or non-conforming lender,
- Consolidation of existing debts to a new loan facility.
The main aim of refinancing ultimately has to be to achieve a better financial position than the current one. Although a true reduced rate offering is a key financial benefit of refinancing, the type of loan and its attributes are equally important. At Keypoint we’ve helped many clients refinance to a loan that is more suited to their specific needs and this has helped them get back on track with paying their loan down.
Contact us at Keypoint and we can show you how you can save in interest costs and reduce your loan term by years.
Exit and Entry costs
When evaluating your refinance options, care needs to be taken in considering possible exit and entry costs.
Many clients think only in interest rate terms when comparing one loan to another when deciding to refinance their current loan. However, you need to ensure any transitions costs involved in the refinance don’t diminish the expected benefit of refinancing.
Costs associated with exiting your current lender may include:
- Discharge and/or legal fees,
- Early repayment fees (although these are no longer charged, some old loans still have some early repayment charges attached to them),
- Fixed rate adjustment or penalty charges (these costs can be large).
Costs associated with entering a loan with your new lender may include:
- Application and/or settlement fees,
- Ongoing maintenance fees,
- Lender mortgage insurance (LMI) fees if yourloan to value ratio (LVR) is over 80%.
Let Keypoint help you work out your true benefits of refinancing.