The biggest reasons why people stick with the same home loan forever is it is too hard to change, or not realising they can switch to another loan, or both.
By researching and checking with other lenders, and you’d be amazed at how much you could save. If you don’t have time to do this yourself, organise a meeting with a Mortgage Broker and they can do all the work for you. We have Mortgage Brokers who can so this work for you, saving you the time.
For example, if you have a $360,000 loan with a 4.24% variable interest rate, by switching to a low variable home loan rate of 3.74%, you’d save more than $37,000 over the 30-year life of the loan.
Have your documents in order
Just like when you applied for your initial home loan, it’s important that you’ve got all the necessary paperwork, documentation and information on hand if you want to refinance your home loan.
Particularly if you’re switching lenders, applying for the new loan will likely require all the same information that you provided when locking in your initial loan. So if you want to act quickly, it pays to keep all your documents handy, and keep your list of assets and liabilities updated.
Double down on savings
Refinancing your home loan with a cheaper rate will give you more money in your pocket. You can put those savings straight back into your home loan, saving you even more money in the long term.
For example, on that $360,000 loan, if you were to put the $100 you save each month, by switching to a cheaper rate, and pay that off your home loan, you’d save more than $27,000 in interest over the life of your loan, and have it paid off three years earlier.
Please contact us if you’d like the contact details of some great mortgage brokers who have successfully helped many of our clients save money in the past.
Article Written by Joeli Spencer.
Joeli is the Administration
Officer at South East Accounting.