Youβve been thinking about refinancing.
Maybe youβve seen the ads from a lender about refinancing and wondered if itβs right for you. Or maybe every time you pay your mortgage you wonder if youβre paying too much.
Refinancing can help you secure a more competitive interest rate, access the equity in your home, and let you add features like multiple offset accounts or consolidate your debts. But there are some important questions to consider before you get the ball rolling and contact Pinpoint Finance.
1. Has my financial situation changed since I first got my home loan?
Refinancing is viewed by the lender as a brand new loan application. Youβll need to supply documentation like you did when you first got the loan. The good news is that this time round you wont need to race around picking documents up from here and dropping them off there, because Pinpoint Finance operates seamlessly online, and most or all of your documents can be submitted electronically from the comfort of your own couch.
Itβs important to think about your ongoing ability to pay off your loan, particularly if you have made or are planning on making big changes that will affect your financial situation, such as starting a family or quitting your job to start your own business.
Of course, if youβve just received a big pay rise or are now an empty-nester, this may mean youβre in a better situation than ever to qualify for a better loan, and Pinpoint Finance can guide you to the best lender for your situation.
2. Will the refinance really save me money?
Negotiating a lower interest rate or consolidating debts may seem like a financial no-brainer, but the fees associated with switching loans need to be considered to ensure that you really do save money.
Fixed interest rate loans can be particularly expensive to break during the fixed interest rate period but your lender will give you estimated costing of what this would be.
If you originally borrowed more than 80% of the value of your property and paid lenders mortgage insurance (LMI) you will want to ask your mortgage broker or Pinpoint Finance to arrange a Desktop valuation to ensure that you arenβt charged LMI again as LMI isnβt transferred between lenders.
In other words, thereβs a number of nuances and subtleties that all need to be taken into account, and Pinpoint Finance can help you to do that.
3. Am I planning on keeping the property for much longer?
If you plan to sell your property within the next two years, refinancing might not be the best solution. Similarly, if you have less than $100,000 to pay off your loan then refinancing may only provide a marginal cost saving. You need to take into account both where your property is at now, and what you plan to do with it in the near future.
Refinancing can help you save money, but itβs worth considering your plans and options before you decide to go ahead with it.
When youβre ready to refinance, or need to speak to someone to help work out whatβs best for your unique circumstances, contact your mortgage broker or Pinpoint Finance and weβll help you to move forward.