There is only one way you can save money on your home loan, and that is by switching or refinancing. Doing this can also free up cash for renovations, to purchase an investment property or for other purchases like motor vehicles or furniture. Speak to your MediPro Specialist before making this decision, in order to see where you stand and what is involved, or even if it’s worth doing at all.
How MediPro Can Help You
Why might you refinance
Maybe your current loan isn’t the best bang for your buck today. Your MediPro Specialist can give you a home loan health check to ascertain and compare lender options to see if refinancing makes sense, and what might be possible.
Some reasons why you might consider refinancing may include:
- To access the equity in your home loan for renovation, a new car or investments.
- Access to a better interest rate and repayments
- Locking in a fixed interest rate or changing to a variable rate
- Reducing or extending your loan term
- Getting extra features or a better package
- You want to change banks
It is imperative that refinancing fits with your long-term plans. That way the right lender and the right loan can be tailored to suit your needs. Here are some things to consider when you’re refinancing:
- Pros and Cons – do the benefits outweigh the costs
When refinancing and changing your loan or lender, usually there’s a cost involved. Your MediPro Specialist can do the number for you and give you an accurate assessment of whether it is in your best interest to make a move.
- Longer term means increased repayments
If you borrow more money, or increase the term of your home loan, it can impact significantly on your total repayments over the life of the loan.
- More than one lender often means more time
When you switch lenders, you will have to deal with two lenders simultaneously. Each has their own processes and this can mean frustrations or delays in some cases. Your MediPro Specialist can help you circumvent these delays due to our vast experience and relationships.
- Not a quick fix for financial problems
You might be thinking of refinancing your home loan to access equity to repay your debts. Please ensure you speak to your accountant or your financial adviser first before you make any decisions as there may be better options for you.
The cost of refinancing
Most people choose to refinance or change to a new loan in order to put themselves in a better position financially. It certainly can achieve that for you, but it is very important to understand the costs involved for your particular situation as it does mean that you are taking out an entirely new loan contract. Your MediPro Specialist will help you with assessing your loan options and lenders, and clearly explain your options. Typical costs you might find while refinancing are:
Typically lenders charge a percentage or flat fee for payout out an existing mortgage early, however it does not apply to every loan.
If you want to restructure you loan, you may need to pay a fee. This is more likely to apply to basic no frill home loans, rather than professional packages.
Should your loan size increase by refinancing, you may need to pay government charges and other fees such as stamp duty.
May apply or increase if you borrow more than 80% of the property value, and can’t transfer your old LMI to your new lender.
There’s a chance that you may need to pay an application fee, valuation fee and settlement fees to a new lender. In some cases, the new lender will cover all these costs as well as your cost of moving.
Refinancing can offer big savings advantages given that interest rates are low and lenders are making it easier to switch home loans. But remember that this should be all about interest rates. Your new loan needs to fit into your long term plans, and the benefits needs to outweigh the potential cost of refinancing. Here are some savings you could enjoy by refinancing:
A great interest rate can save you thousands of dollars in interest over the life of the loan. You might achieve this by switching from variable to fixed, or vice versa. You could also split your loan to hedge your bets. Either way, there are savings to be had.
There are lenders out there that can offer loans with lower or even no monthly fees or additional charges to your home loan. Over time this could mean big savings and could be better spent paying off your loan faster, which means less interest.
You may owe money on credit cards, car loans, and personal loans. The less debt you have, the easier it is to manage your mortgage, and life in general. Speak to your MediPro Specialist and find out whether rolling this debt into your home loan could save interest and ease your financial burden.
The only way to find out if changing loans will save you more, is to get a health check done on your current financial situation. MediPro Capital Finance will do the analysis, comparisons and can organise your new home loan for you, completely free of charge.
Equity is the difference between your home’s current value and what you owe against it. Refinancing can give you an opportunity to access this equity and put it to good use. Lenders see home equity as a secure alternative to cash, so you can use it to purchase or maybe for an array of difference, some of which may be:
You could use the equity as a deposit for an investment property and grow your property portfolio. Should it be enough to cover at least 20%, you could also save on LMI.
Upsize or renovate your current home or investment property without getting into extra debt.
Speak to your financial adviser or accountant prior to making this decision, but with proper planning you could pay for a holiday or new car without getting into heavy debt.
It is so very important that you understand how every dollar spent can affect your debt and repayments. When you refinance, you could free up money to invest in other areas or spend as you choose.
How to Refinance
We are here to help you every step of the way, from working out whether refinancing is a good idea in the first place, to finding you a better loan and arranging everything through to settlement.
Your MediPro Specialist can do it all.
- Discuss your current situation and needs
- Compare all options from over 30 lenders
- Determine if refinancing is right for you
- Negotiate a great deal for you
- Complete the application forms
- Package and lodge your application
- Liaise with the lender
- Give you good advice
- Do your legwork and paperwork
- Ensure your old and new lenders sort everything out
- Take care of any issues that may arise