What you need to know about refinancing
Published 07 Jun 2017
When buying a house for the first time, there's a chance you might get roped into a mortgage package that is less than ideal. Thirty years is a long time, so it's important to make sure you're getting the best possible deal in your mortgage, both when first buying and down the road.
Luckily, there is the option to revisit and amend your initial contract - this process is called refinancing. Homeowners who are in the process of entering or refinancing a mortgage should consider seeking the help of a Parramatta property lawyer to ensure they receive the best outcome.
What is refinancing?
When you choose to refinance your mortgage, you are electing to change the format of your mortgage contract to better fit your current situation. This can look different depending on the individual circumstances, and everyone has various factors that influence their decision to refinance.
One common reason for seeking a new loan would be if you were struggling to pay the fee each month and wanted a lower rate - this would, of course, come at the cost of either higher interest rates or a longer mortgage. Regardless of your reasoning, it's important to make sure the time is right before you refinance, as there are many factors that can play into whether or not you will ultimately save money by switching.
When you should refinance
If you're unhappy with your current mortgage package and are considering refinancing, look at your situation to see if it matches up with these indications that now might be a good time to get a new loan:
1. Your financial situation has changed significantly
2. You need more money monthly for something else (renovation, child's education, etc.)
3. The market is high and your current rate is no longer competitive
As you navigate these waters, one thing to watch out for is companies claiming their loans will help you pay off your mortgage faster. Ultimately, you're going to have to choose between contract length and higher fees or interest rates, so be mindful of deals that seem too good to be true.
Before switching to another company, it also makes sense to ask your current lender if they can make you a better offer and, thus, keep your business. If you're still unhappy, reach out to other lenders and ask to see a side by side comparison of their different options before making a decision.
Refinancing a house can be complicated and risky, so make sure to get in touch with a lawyer if you're having issues or would like advice.
Please call us on 02 8833 2000 to speak with a lawyer
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