Refinancing

Things change, and chances are since you got your home loan interest rates may have moved, and life has too. Has the official cash rate changed since your current loan settled? Has the rate your lender is charging you changed? What about the fees and charges? Chances are the market has changed too. New products designed to attract borrowers are always being introduced, and lending appetites are an ever moving feast. Let’s not forget that things have probably changed in your life too since you took out the mortgage. Your income may have changed, and your expenses probably have too - your financial goals could also be different. Even though most loans are around 30 years in length, you may be surprised to hear that Australians often change their home loan every 4-5 years as they refinance. Refinancing is a chance to look at what’s out there and to check to see whether your current loan is still the right one for you. If it’s not, it may be time to refinance. If you are looking to switch, this guide contains some of the key things you may want to consider.

Over the last few decades, the values of some properties have often risen more than the rate of inflation. Some say property ownership is a national obsession, with affordability issues, house prices, and interest rate movements constantly in the news. Apart from a common general understanding of the market, there are other reasons people like to invest in property. Some common ones being the potential for capital growth (how much the property rises in value over time), return from rent, and tax benefits. You’ll find more about these over the next few pages. Another plus is you don’t need to be a long time investor with lots of funds on hand to start investing. If you already own a home that’s increased in value, you can potentially unlock this equity to help purchase another property. Or, if you’ve yet to buy your own home you can use the rent to help pay the mortgage on an investment property and get a start in the market.

Of course you can go to a bank, but this can be trickier than it sounds. Firstly, which one do you choose? Which of their products is right for you? And what about other lenders, building societies and credit unions? Australia is indeed the lucky country. We are blessed for choice when it comes to the amount of competition that exists when it comes to the mortgage market. With so many lenders, and so many products under each of their brands, it’s important you make the most of this regarding who and what you choose when it comes to your home loan. There are a lot of options out there and, with regularly moving interest rates and new products, it’s an ever-changing market. And let’s not forget that if you’re a first homebuyer, you’re probably very new to this. That’s why a broker makes sense. We do this everyday. We know the lenders, their products and policies and we keep up-to-date with changes. We help choose what’s right for you. Banks enjoy working with brokers, as we do a lot of the banks’ work for them and making their jobs much easier and may help speed up the application process and get you the top-notch customer service you deserve. In the simplest terms, having a broker in your corner makes finding the right loan easier and can save you time and, hopefully, money.

The first thing we will do is work out your borrowing potential. You may have a dream home in mind but first you need to know if you can afford it. There are many factors that will influence your decision around what to buy and where – proximity to work and family and your stage of life are just a few – but the single biggest decider is nearly always what you can afford. It’s really a case of looking at the big picture and working your way back from there. Consider your household income and what you realistically can afford in loan repayments, taking into account all of your expenses (even coffees and lunches). As a guide a mortgage calculator can be a great place to start, but it won’t take into account all of your personal circumstances or eligibility for a loan. Talking to us will give you a much more accurate idea of what you can afford. We can look to obtain pre approval from a lender so you can put an offer on a home when you find the one you like. Of course, even with a pre approval a subject to finance clause is an important protection.