New Year is fast approaching! Make this your Happy “Review” Year as well!
There are lots of reasons why you should regularly (annually after New Year celebrations is always a good time) check your interest rate, repayments and features on your Home Loan. In many case, refinancing to make sure your loan is working for you can save you thousands over the life of your loan.
Here are just a few to consider:
- Get a cheaper interest rate. Ask your broker to compare all lenders and current specials available with the Banks not even advertised yet. Savings can be a big motivator, see what a difference it could make.
- Change the type of loan like a sharp fixed rate, a honeymoon variable interest rate, an interest only loan or a line of credit.
- Get more loan features like an offset account, ability to pay extra, fee free ways to access your redraw.
- Consolidate debt and pay out smaller debts with higher interest rates like credit cards and personal loans.
- Access equity for other things you want to do like renovations, go on a holiday or buying a car.
- Invest elsewhere. Use your equity to invest in property, shares or managed funds.
Quick tips when refinancing your loan:
Do not send in multiple applications
Each time you apply it will be recorded on your credit report as an enquiry. If you have multiple enquiries it will impact your credit score. Only submit an application if you intend to go with that lender and you know that your scenario fits their criteria regarding serviceability, property location etc. Ask your broker they know which lender to apply with for you!
Be realistic about your property’s value
Do your research so you know what your property is worth. Having a realistic figure can help when you do calculations to ensure it is worthwhile refinancing.
Put off applying for more credit
The available credit limit on your cards will impact your affordability. Don’t apply for more credit and take a good look at the limit of your credit facilities like personal loans and credit cards. Reduce them if you don’t actually need the full limit.
Don’t change jobs
Employment stability is important when assessing your income. You may be required to have started your new job or have been in it for a while or even past probation before the lender will be comfortable using your income.
Get your paperwork ready
You can reduce the waiting time and speed up the process by having your documents ready. Start saving your payslips, payment summaries and mortgage statements.
– Guest blog by Jenel at Green Apples Finance
You need to consider with your financial planner (or adviser), your objectives, financial situation and your particular needs prior to making an investment decision. Sensibly Pty Ltd and its authorised representatives (or credit representatives) do not accept liability for any errors or omissions of information supplied on this website
Nick Shanley, Steve May, Luke Styles and Shanley Financial Planning T/A Steve May Financial Services are Authorised Representatives / Corporate Authorised Representative of Sensibly Pty Ltd, AFSL 533923. Please refer to our website at www.stevemayfs.com.au to reference our Financial Services Guides.
