Home loan defaults are climbing across the country, but there is a way to relieve mortgage stress. Refinancing your loan could save you almost $14,000!
An increasing number of Australians are falling behind on mortgage payments. Fitch Ratings reveals a 30% increase in arrears during the three months to March.
While homeowners received another rate reprieve from the Reserve Bank of Australia in June, there is a way for borrowers to take matters into their own hands and significantly reduce their own mortgage stress.
The latest issue of Your Investment Property’s sister title, Your Money Magazine reveals refinancing your mortgage can save you thousands of dollars over the life of your loan - and there’s never been a better time to consider your options.
Over the last few months, lenders have been aggressively competing with each other in the home loan market in an effort to boost market share.
Mortgage Choice company spokesperson Kristy Sheppard noted, “There are some highly competitive deals on the table for new borrowers just as there are for those looking to refinance. Get out here and get amongst it if you’re looking to enter the market. Take a good look around.”
She adds, “Anyone who hasn’t at least explored their options could easily be giving themselves a raw deal by simply going with their everyday lender or ignoring the possibility of switching to a better suited or more affordable home loan.”
Refinancing isn’t for every homeowner and there are a couple things you should look at before you consider what else is out there.
Step 1: Review your loan – check your rate, fees and other costs
Step 2: Compare online – www.yourmortgage.com.au
offers up-to-date information on what’s available in the market. When comparing loans, be sure to look beyond the rate. Other criteria that might be important to you:
- loan support/service
- loan term
- extra features: offset account, redraw facility
If your examination reveals there is a better deal for you, then it’s time to look at the numbers. The best way to break it down is to make these calculations:
- How much interest will the new loan save?
- How much it will cost to get out of your current mortgage?
- How much it will cost to set up new mortgage?
If the interest saved outweighs the costs to get out of your current mortgage and set up a new one, then refinancing could be the next best step. (Loan calculators and tools can be found here http://www.yourmortgage.com.au/calculators/)
For a complete guide on how to refinance your mortgage, check out the August edition of Your Money Magazine. The issue also includes a breakdown of the best refinancing mortgages on the market today!
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