Maybe you’re after lower repayments. Perhaps you dream of investing, using the equity in your home. There is no doubt that refinancing can offer a world of benefits as long as you avoid these common pitfalls.
1. Interest rate blindness
A low interest rate can be so dazzling that it makes the mortgagee temporarily blind to other negative aspects of the loan, like inflexibility and high fees. In fact, a mortgage product with more features (an offset account, redraw facility) may cost a bit more, but could save you more in the long run.
2. Honeymoons don’t last
Introductory interest rates and bonus offers are designed to lure you into a loan product that you may not otherwise choose. Calculate the costs and savings over the life of the loan before assessing if that amazing discount actually represents good value. Once the introductory period (the honeymoon) is over, the interest reverts to a higher standard variable rate for the rest of the loan term and may end up costing you considerably more than you expected.
3. Going it alone
Looking at a loan comparison website might be helpful when you are thinking about refinancing. However there are so many variables involved in comparing loan products that you really need an expert to help you weigh everything up. Discharge and application fees, a valuation fee, land registration fee, break fees, stamp duty and mortgage insurance may apply. Sometimes clients just want to change their loan while others want to change their lender. Fast Debt Help can work for you, comparing and evaluating loan products and doing the maths so you can make an informed choice.
4. Ignoring good advice
After going through the evaluation process with Fast Debt Help, clients may find that refinancing is not the best choice for them at that time. Occasionally, a client is determined to refinance and ignores expert advice. That can be very costly for them when they secure a loan that does not serve them well.
There certainly are some traps to avoid, but getting Fast Debt Help on your side to add expertise can take the stress out of refinancing. You will receive the benefit of experience as we show you the many options available. The decision could save you thousands, fund that renovation, kickstart your property investment career or simply find a loan that suits your life a little better.