Fletcher Rowe | November 2 2017
One thing thing that most mortgagees will attest to is harbouring a small, albeit impassioned, feeling of bitterness towards their bank. We know that a mortgage is part and parcel in keeping a roof over our heads, but at the same time, we’d jump at the opportunity to keep a bit more spare change in our pocket at the end of the month (and out of those of the greedy executives at the bank!).
Another that tends to hold true for our clients, is that most have preconceived misconceptions about how difficult it is to take this mortgage elsewhere and reduce their repayments.
In reality, there is never a bad time to look at the options out there; the market is always evolving, and just because your rate is competitive now, there are no assurances that this will be true in 12 months’ time.
Refinancing your home loan is not nearly as difficult as when you first purchased your property, and this process is actually becoming more straightforward as banks and other lenders try to capitalise on those asking why they’re paying too much on their home loans.
In fact, some of our major banks are offering rebates of up to $1,500 for clients who refinance their debts – often covering the entirety of costs.
But where do you look? And how do you know if your rate is as good as, or better than, what else is out there?
Well, for a start, if your home loan was last reviewed over 12 months ago, you’ll probably find that there is now a better product out there.
A lot of customers are reeled in by special, introductory rates, which tend to be very low compared to the market at the time. These rates expire, usually after 2 or 3 years, after which they revert to a rate that is actually on the higher end, and up to a full percent higher than what they signed up for. If you’re not switched on, you could be copping a well above average rate for the remaining period of your loan’s contracted term – up to 28 years.
Listening out to what you hear and see on radio and TV can give you a good guide of where the market is placed and where it is headed. While those super low rates that seem too good to be true tend to be just that – riddled with hidden fees and charges – what is out there tends to be a fair reflection of where rates are going. If you’ve noticed other’s rates seem to be getting lower while yours is staying the same or even increasing, it might be time to ask the question of your bank or look elsewhere. Often, it only takes calling up your lender to see what they will offer to retain your business. It shouldn’t be too surprising that they become far more generous once it looks like you are headed elsewhere!
Often it is difficult to distinguish between what is out there and what is available to you. Truth be told, a lot of what is advertised is only applicable to a portion of customers. Additionally, those comparison sites tend to be cumbersome to navigate and very vague in their offerings which doesn’t exactly equate to a great amount of confidence or transparency in what’s available. These services have to be deliberately vague, as without performing a more thorough assessment of your debts and position, they open themselves up to litigation from consumers and regulators by offering rates that aren’t suitable.
Just as Dr Google is the worst person in the world to diagnose your recent headache, Googling a solution to your finance requirements is unwise at is bypasses the necessary analysis of your situation and opens the door for unwanted credit enquiries that can harm your borrowing potential down the track.
What is required is an experienced agent who can review all of your information and find the most suitable product based on your requirements and short to long-term goals. A good broker will have immediate access to a litany of lender options, and will be able to compare those that apply to you. Further, they take the uncertainty out of the move, explaining the processes at every step and guiding you through what would otherwise be a step into the dark.
With your mortgage usually being the largest bank transaction you will ever make, you want to make sure what your doing is the best thing for you; not your bank.
IFA Mortgages & Finance are a no fee mortgage broker service. Discover what it means to talk to an experienced lending expert who will develop a buying strategy that is tailored to you.