| refinance, mortgage | 8 Apr 2008 12:00 AM |
| Refinance – I took the plunge! by Michelle Kour | |
Recently, I embarked on a household budget plan. I began in the usual manner such as accounting for daily, weekly, monthly and to a lesser extent annual expenses and how I could save a ‘buck’ or two or even just trim costs by changing my payment methods. What amazed me the most about my strategic plan was that once I had listed what I thought were my main expense items, I had overlooked the most important expense of them all – my home loan! It was at this point that it dawned on me……let’s look at a possible refinance. Amazingly, if I were to refinance my home loan to a more suitable and cost effective product, I could potentially save more in interest charges over a twelve month period than I could by reviewing my combined day to day household expenses.
I began by asking myself, what did I want from a refinance? Obviously I wanted a lower interest rate from the refinance. I also wanted lower interest charges and fees from the refinance. Importantly, I wanted to know how I could make my new loan work for me by utilising any surplus income i.e. savings, changing payment methods, etc, from the refinance. I found that from doing my own refinance research on the internet by way of search engines such as Google, Yahoo and MSN Australia, I was able to avail myself of some very useful information and tools such as mortgage calculators.
The results were amazing! What really stood out for me about a refinance of my loan was that it wasn’t necessarily a lower rate that was going to save me money. There were definitely other factors to consider when undertaking a refinance such as 100% Offset accounts (particularly whilst on a fixed rate), additional repayments whilst on a fixed rate, no ongoing fees and charges, just to name a few.
I always believed that a refinance of my home loan would just simply involve too much work and time that I didn’t have to spare. Having now taken the time to do my own research and calculations, and seen what I can now save in interest charges as well as reducing my loan term, I have a completely different outlook when it comes to a refinance of my loan, to the point where I would recommend anyone who has had a loan for an extended period of time that they should consider a refinance to a more suitable product.
After you have researched refinance options, made use of tools such as mortgage calculators, you are now in a position to really know what you want to refinance to. Before you begin negotiating with new lenders, always remember as I did, to make your first port of call your existing lender. You may find that your existing lender has access to new products that they may be able to refinance you into with the added benefit of assisting you with some of the costs associated with your refinance.
It’s time to act now! The longer you wait to refinance the more it could cost you. Just think to yourself how much time and effort goes into saving a few dollars here and there by chasing fuel vouchers, shop-a-dockets and weekly specials. These are continuous and sometimes arduous tasks. Once you refinance your loan to a more suitable and cost effective product, your job is done and you begin to save. The message is simple, if there is a sustainable cash flow benefit to you ……refinance!
I began by asking myself, what did I want from a refinance? Obviously I wanted a lower interest rate from the refinance. I also wanted lower interest charges and fees from the refinance. Importantly, I wanted to know how I could make my new loan work for me by utilising any surplus income i.e. savings, changing payment methods, etc, from the refinance. I found that from doing my own refinance research on the internet by way of search engines such as Google, Yahoo and MSN Australia, I was able to avail myself of some very useful information and tools such as mortgage calculators.
The results were amazing! What really stood out for me about a refinance of my loan was that it wasn’t necessarily a lower rate that was going to save me money. There were definitely other factors to consider when undertaking a refinance such as 100% Offset accounts (particularly whilst on a fixed rate), additional repayments whilst on a fixed rate, no ongoing fees and charges, just to name a few.
I always believed that a refinance of my home loan would just simply involve too much work and time that I didn’t have to spare. Having now taken the time to do my own research and calculations, and seen what I can now save in interest charges as well as reducing my loan term, I have a completely different outlook when it comes to a refinance of my loan, to the point where I would recommend anyone who has had a loan for an extended period of time that they should consider a refinance to a more suitable product.
After you have researched refinance options, made use of tools such as mortgage calculators, you are now in a position to really know what you want to refinance to. Before you begin negotiating with new lenders, always remember as I did, to make your first port of call your existing lender. You may find that your existing lender has access to new products that they may be able to refinance you into with the added benefit of assisting you with some of the costs associated with your refinance.
It’s time to act now! The longer you wait to refinance the more it could cost you. Just think to yourself how much time and effort goes into saving a few dollars here and there by chasing fuel vouchers, shop-a-dockets and weekly specials. These are continuous and sometimes arduous tasks. Once you refinance your loan to a more suitable and cost effective product, your job is done and you begin to save. The message is simple, if there is a sustainable cash flow benefit to you ……refinance!
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