I’ve been recently running some Q&As with our local customers here in Gladesville, answering their questions about mortgages. I’ve noticed that there are a number of myths and misconceptions that keep coming up, so I thought I’d address the 8 most common.

1.   Once I find a good rate, I’m sorted for the life of my loan. Wrong! Lenders can move their variable rates at any time, so a loan that’s competitive today may end up being really expensive in the future. So it’s vital to take a look at your loan once at least a year.

2.   It’s not worth refinancing a mortgage for an improvement of half a percent. If you have a $350,000, 30-year loan with an interest rate of 5.24%, and you refinanced to a rate of 4.74%, you would save $107 a month and $38,480 over the life of the loan. That’s a massive saving!

3.   A competitive rate doesn’t really matter because the Reserve Bank controls home loan rates. The RBA adjusts the cash rate from time to time but each lender can change their rates as they see fit. So if you want to get the best deal make sure you compare rates between lenders. At YBR Gladesville our aim is to get you the best rate on the market so our friendly brokers will work this out for you.

4.   I can’t refinance a fixed-rate loan. Not true. You can refinance a fixed rate loan but you’ll be hit with a break cost, which is compensation for the loss the bank will incur when you leave. Speak to your local YBR mortgage broker to weigh up the break costs versus the potential savings and see what you come up with. More questions? Make an appointment with one of our advisors at YBR Gladesville today!

5.   I want to use a mortgage broker but what about the fees? Mortgage brokering fees are paid by the lender, not by you. A mortgage broker finds you the best loan at the most competitive rate, so pop by your local Gladesville branch and speak to one of our experienced mortgage brokers today.

6.   I’m too old to refinance my mortgage. Age discrimination is illegal. A bank looks at your repayment ability, so they’re looking at your income and the loan term. If you’re close to retirement, you can look at shorter loan terms or alternative exit strategies. There is always a solution when it comes to refinancing your home loan and our mortgage brokers are trained to help you find it.

7.   Self-employed people pay higher interest. If you’re self-employed and can’t produce your tax returns, you may be offered a low documentation loan which can have higher interest rates. If your financials and tax returns are in order, you qualify for the same rate as a regular PAYG employee.

8.   Banks keep secret files on my credit history. Wrong. All lenders use a credit reporting system to check your history. Know what they know by finding out your history at www.mycreditfile.com.au. If you’re having trouble understanding your credit history or worried that it will impact your ability to refinance your mortgage, make an appointment with our mortgage brokers today. We’re sure to find a solution.

Alan Khaw's Top Mortgage Tip: Be Informed

My parting advice: be informed before signing anything and always communicate with your local mortgage broker. Most lenders would rather find you a better deal than lose you as a customer. So if you have any questions or would just like to chat about how I can help you refinance your loan, then feel free to give me a call or drop by our local branch in Gladesville today.