With the government set to ban exit fees from the start of the coming financial year, a greater number of borrowers are reconsidering their current mortgage commitments and opportunities offered through refinancing.

There are a number of key reasons why borrowers should consider refinancing. Importantly, while your home loan might have been right for you when you purchased your property, there’s a good chance there might be a more appropriate product on the market that meets your changing needs.

Perhaps you’ve recently had a child and moved to one income, for example; maybe you’ve changed jobs and have greater earning capacity – all of these factors can influence the relevance of your mortgage.

As well as ensuring that your mortgage is right for your current situation, refinancing has a range of other usages.

You can refinance your mortgage to finance a renovation, free up funds to cover the deposit on an investment property, consolidate high interest rate debts, or even help your children raise a deposit for their first home.

The good news is that if you’d like to take advantage of refinancing your mortgage, it’s easy to arrange. However there a number of key points you need to consider.

Importantly, there may be fees and charges associated with refinancing – so before you make any decision to move your mortgage do your sums to ensure you will be better off in the short and long term.

If you are unsure whether refinancing is right for you, give us a call.

We can determine whether refinancing is the best option as well as assist you with identifying the products most suitable plus coordinate the application process.

The cost of refinancing

While it certainly has its advantages, refinancing also has its pitfalls – including potential fees and charges.

To avoid being caught off guard and out of pocket, here are a few fees you may possibly incur:

• Applications, establishment and handling fees when applying for your new loan

• Early settlement fees on your existing loan

• Valuation fees

• Mortgage insurance

• Discharge fees on your existing mortgage and registration fees on your new one

• Stamp duty

Courtesy of Kevin Mortimer - Lending Services Victoria

Realities of refinancing