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Take the money and run: Should you refinance your home?

Take the money and run Should you refinance your home?

June 23, 2011

The number of people currently seeking to refinance their home loan forms a larger percentage of home loan applications than first homebuyers or investors.

Whether you’re looking to move to a bigger house, your circumstances have changed, you’re concerned about interest rate rises or you simply feel you’re current mortgage is a big, dull dud, mortgage refinancing can definitely help improve your current and future finances.

Here’s a checklist of things to consider when you start shopping for your new home loan:

  • Directly compare your current mortgage with other loans but even if the new products come out on top, you still need to examine the numbers carefully.
  • Before you even begin the process, try and pay off as much personal debt, like credit cards, as soon as possible.
  • Try and defer any major change in your personal circumstances before you begin the application process. This includes starting a new job or adding to or starting your family.
  • You can save a lot of time by approaching your current lender and asking for a better deal. Competition in the mortgage market is fierce and many of the major lenders have entire departments dedicated to trying to retain your business.

RateCity’s top variable home loans that don’t charge an early exit fee:

  1. Loans.com.au, Dream Loan Express – 6.58%
  2. Mortgageport Management, Essential – 6.69%
  3. eMoney, Full Doc Variable Pro Pack – 6.71%
  4. Collins Home Loans, Variable – 6.72%
  5. State Custodians, Standard Variable – 6.79%

Please note: interest rates are correct as of time of writing, non-bonded institutions only, excludes introductory rate home loans.

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