Sometimes wading through the copious amounts of information and offers out there on refinancing can be a difficult and overwhelming task! The idea of re-financing can be appealing but let’s be honest, so can avoiding the headache and sticking with what you know!
Well here is some good news for you, it’s much simpler to explore than you think.
Do a Financial Health Check
Just like we all (should!) do regular health check ups, reviewing your loan is also important as our personal and financial circumstances change.
First and foremost, your home loan should be suited to your current circumstances, which can have significantly changed from when you were first financed. What worked for you when you first purchased, may be a different story 5 or 10 years down the track. Whether it’s an increase in financial responsibility, a decrease in income or that you are now in fact positioned better than you were several years ago, your mortgage should align with your current needs, lifestyle and goals.
With this in mind, let’s review a few basic points that will help you make an informed decision!
Right now in Australia, interest rates are at a historic low. Depending on how long you’ve had your current loan, you could be paying much higher rates than are necessary.
To demonstrate the downward trend, there has been a significant shift in the Reserve Bank of Australia (RBA) Cash Rate in the last 10 years. In March 2010 it was 4.00%. In May 2012 it was 3.75%. In May 2013 it crept down to 2.75% and it is now currently sitting at 1.5%. This in turn influences the interest rates that Financial Institutions charge customers and it will vary.
Shop around for a competitive rate
With the drop in interest rates and the ability to shop around, it is the perfect time for a health check! For this reason, Lenders are far more competitive and whether your goal is to pay off your debt sooner or to have lower monthly repayments, there is a strong possibility you can better achieve your financial goals.
What are your current and future financial goals? Interest rates are not the only thing to consider. Whatever loan product you choose needs to have the features to fit with your current and future goals. Whether you would benefit from an offset account and redraw facilities or the need to pay Lenders Mortgage Insurance (LMI) are also things to consider.
Remember, there is no ‘one size fits all’ solution to a home loan! As such, we may have got you thinking and generated more questions than answers, specific to your situation!
I have more good news! Expert mortgage advice will help you cut through all the noise and provide you with answers. Kim McMaster has extensive experience and a passion for assisting people to find the Home Mortgage that’s just right for them.
Call 03 5143 0135 or 0438 235 375, or drop into our office at 364 Raymond Street, Sale. Alternatively, send an email to email@example.com