We’re always looking for way to save money, but one
place where people forget to look also happens to be their biggest household
expense: their mortgage. And I believe the reason why people don’t look closer
at their home loan is because the idea of refinancing seems too difficult, too
confusing, or is perceived as probably not worth it for the effort. If you’re
one of those people, it’s time for you to come by our Pakenham
branch and speak to one of our friendly mortgage brokers, but first, ask
yourself some questions:
What’s my rate?
In my experience, many people know what their monthly payments are, but they
don’t actually know their interest rate. Do you? Take a look – if it starts
with a “5”, it’s time to shop around and our mortgage brokers
can definitely help.
What does the
Use a comparison site and find out
what’s on offer. The current market for variable rate mortgages runs from high
3% to over 6%. Three-year fixed rate mortgages range from the low fours to well
over 6%. There’s a lot of difference, which means there’s solid scope for
savings There’s a lot of difference, which means there’s solid scope for
What could I
Use the comparison sites to calculate several results. 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.
What must I have?
Have a good repayment record with your current lender and ensure you are not
currently in arrears. Also, know that if you’re half-way through a fixed-rate
loan you may be charged a break fee to leave. Make sure it’s worth it. At YBR Pakenham we can help you understand your credit
history and weigh up the pros and cons of breaking your fixed-rate loan.
What are my other
A new lender will likely charge upfront fees, and
there may be some costs to exit your mortgage. Also, if you have less than 20%
equity in your new loan, you’ll pay lenders mortgage insurance, which increases
Who do I see?
to a mortgage broker or approach a lender directly, and
if you can’t make it to see us in person, then give our local branch in Pakenham
a call. Mortgage brokers are
refinancing experts who know how to streamline the process and find you the best rate available in the market.
How long will it
take? What do I have to
Refinancing your mortgage doesn’t need to be a lengthy or
difficult process. Our experienced mortgage
brokers and loans managers can give you a quick run-down
of the process, the application, the documents they want you to provide, and
the time it typically takes.
Is it worth it?
You must answer this yourself. The total interest paid on a $300,000, 30-year
mortgage at 5.6% is around $66,000 more than the same mortgage at 4.6%. You
have to decide it this is worth the effort of refinancing.
If you still have any questions about your home
loan or would like to speak to a mortgage broker about how you can save, then
feel free to stop by our Pakenham Branch or give us a call.