"WHAT YOU NEEDTO KNOW BEFOREYOU REF INANCE

YOUR HOMELOAN"

LET 'S GETSTARTED

WHAT ISREF INANCING?

Ref inanc ing means sw i tch ing your loan f rom one lender toanother i n o rder to take advantage of bet te r i n te res t ra tes , loan

te rms o r mor tgage featu res . Ref inanc ing your home loan canof fe r you numerous benef i t s and save you thousands of do l la r s i nrepayments… but i t can a l so be ve ry r i s ky i f you don ’ t under take

suf f ic ien t research . I f you ’ re th ink ing of re f inanc ing yourmor tgage , he re a re some th ings you need to cons ider befo re

mak ing the sw i tch .

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Peop le dec ide to re f inance the i r mor tgages fo r anumber o f reasons , i nc lud ing (but not l im i ted to ) :

Get t ing a bet te r dea l o r ra teSwi tch ing between var iab le/f i xed ra tesFac i l i ta t ing home renovat ionsConso l idat ing ex i s t i ng debtsAccess ing add i t iona l home loan featu res

Some add i t iona l loan featu res that you might wantto cons ider sw i tch ing mor tgages fo r i nc lude :

Repayment ho l iday - I n wh ich you take a b reakf rom repayments o r reduced repayments to covercareer changes , b reaks o r unexpected f inanc ia lexpenses .

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Offset account - I n wh ich you have a sav ings o rt ransact ion account l i nked to your loan . The ba lanceof the l i nked account i s deducted f rom (o r o f f se taga ins t ) the ba lance of you r loan when the month l yin te res t charge i s ca lcu la ted .

F lex ib le repayments - Where you can make ex t rarepayments a t no add i t iona l cos t i n o rder to pay of fthe loan sooner .

F lex ib le rate opt ions - Where you can d i v ide yourra te between f i xed and var iab le components , o r evenmake in te res t -on l y payments fo r a cer ta in per iod .

Redraw faci l i ty - Where you can w i thdraw anyadd i t iona l repayments you have made on your loan .Th i s i s handy i f you ever need cash in an emergency .

Loan portabi l i ty - Where you can take your loan w i thyou when you move f rom one home to another w i thoutthe expense and hass le o f a r rang ing a new loan .

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Before you dec ide to re f inance , make su rethat you have thorough l y researched yourex i s t i ng loan and the loan you hope to sw i tchto , i n o rder to catch out any downs ides .Ref inanc ing i sn ’ t as s imp le as jus t f i nd ing aloan w i th a bet te r i n te res t ra te - you need tomake su re that you a re aware of a l l the cos t sinvo l ved and work out i f these outwe igh anypotent ia l benef i t s .

Wa lk ing away f rom your cu r rent loan wou ldl i ke l y i ncu r some upf ront cos t s , i nc lud ing :

Discharge feesRegist rat ion of mortgage feesBreak costs ( i f you have a f ixed rate loan)

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You w i l l then a l so have to pay the usua l feesthat come wi th open ing a new home loan ,inc lud ing :

Establ ishment feesLegal feesValuat ion feesStamp duty for your mortgageLender ’s mortgage insurance i f you have ahigh loan to va lue rat io (you may be e l ig ib lefo r a par t ia l re fund i f you have a l ready pa idth i s fo r you r f i r s t loan ) .

Once you have taken a l l these cos t s i n tocons iderat ion , you need to dete rmine whethermak ing the sw i tch i s wor th i t .

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Before you dec ide toref inance , ask you rse l f whyyou rea l l y want to do i t . We

suggest you make a l i s t o f a l lthe featu res that you need in

a home loan , and that youhave a c lear ‘p lan of a t tack ’i n m ind befo re you dec ide to

ref inance . Cons ider te l l i ngyour cu r rent mor tgage broker

that you a re th ink ing ofre f inanc ing - mor tgages a re

a compet i t i ve market , andbreak ing th i s news to your

b roker m ight i n sp i re them tolower your i n te res t ra tes o r

p rov ide you w i th newaddi t iona l featu res ( you

never know! ) .

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the bes t th ing you can dobefore mak ing any rash

dec i s ions i s to c runch thenumbers - cons ider a l l the

cos t s i nvo l ved and take somet ime to compare home loans

us ing a home loancompar i son ca lcu la to r ( to getan idea of potent ia l sav ings ) .We a l so suggest you speak toyour mor tgage broker and/or

a f inanc ia l p lanner befo reyou s ign any papers !

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