News from Davidsons
Finance Update - Refinancing Could Save You Thousands
It’s often said that Australians are more likely to divorce their spouse than switch banks. But with plenty of competition in the home loan sector, refinancing can be a good move.
There are a number of reasons why you might want to refinance: you can consolidate debt from high-interest credit cards into a home loan with a lower rate of interest; you can release cash from your home loan equity for other major purchases; or you might want to simply save on your repayments by moving to a loan with a lower interest rate.
What’s my rate?
If you aren’t 100% sure exactly much you’re paying, how can you find a better deal?
Luckily, finding out your interest rate can be as simple as logging on to your bank’s online banking portal and checking the account information for your home loan.
What do I need?
Make a shopping list of the features you want in a new loan. These might include:
- Variable rate or fixed rate
- Offset account or Redraw facility
- Repayment flexibility
- Ability to pay the loan out early with minimal penalty
What’s on offer?
Davidsons Finance Services will be able to help you choose the type of loan you want, how much you want to borrow and what extra features you need, then compare loans from many different lenders, with information on interest rates and fees and charges. This can help you weigh up the costs and benefits of each loan.
We’ll do all the legwork for you, providing you with a list of solutions that cater to your particular financial needs, getting rid of any confusion and hassles throughout the process.
Check out the costs of getting out – and getting in
If you took out your loan before 30 June 2011, the lender might be able to charge you an exit fee for terminating early. And if you’re on a fixed rate mortgage, you might have to pay a break fee.
There may also be establishment fees for the new mortgages you’re considering, and you may find yourself paying higher ongoing fees, sometimes called administration fees. Some lenders also charge a fee each time you redraw on your loan.
The best thing to do is speak with Davidsons Finance Services, as we’ll be able to advise you of any and all fees that are involved.
Is it really beneficial?
DFS have recently had a refinance approved for a client where they consolidated their credit cards into the home loan. By consolidating the cards into the home loan and taking the loan back out to 30 years the clients have been able to keep the repayments on the new consolidated debt the same as the old home loan payments.
This has now allowed the clients to free up their personal cash flow by nearly $800/m as they will no longer have the credit card payments to make. DFS has discussed paying some, not all, of this saving into the client’s home loan as extra regular repayments. This will help to reduce the overall interest charged and reduce the term of the new home loan considerably.
All in all, the client is very happy as they now feel that they can live again. Free of the stress of multiple payments, due dates and a lot less statements.
Speaking to DFS provides a clear advantage
At the end of the day, Davidsons Finance Services is able to guide you through the entire refinancing process, from start to finish. We have in-depth knowledge and understanding of mortgages, and will help you get the best possible outcome.
Call us on 03 5221 6399 or email email@example.com