Friday, December 10, 2004

Refinancing a Home Loan in Australia

"Costs of Refinancing
The various fees and costs associated with refinancing can easily add up to thousands of dollars. For some Australian borrowers the benefits and savings outway the costs but for others it does not make financial sense. Be sure to do a costing of your current and proposed situations.

Costs that need to be factored in include -
Early repayment charges on your existing loan
Lenders application and settlement fees
Lenders mortgage insurance
Property valuation
Existing Mortgage discharge fees
New mortgage registration
Stamp duty in some States "

Refinancing a Home Loan in Australia

"Why Refinance?
Most Australian borrowers refinance to -
get a cheaper home loan rate
roll debts into a single loan to lower repayments
renovate their home (bathroom, kitchen etc)
switch from a variable loan to a fixed rate loan when rates are rising
switch from a fixed loan to a variable loan when interest rates are falling
obtain cash for a major purchase (car, holiday etc) "

Refinancing a Home Loan in Australia

Refinancing a Home Loan: "What is Refinancing?
Refinancing allows borrowers to obtain a loan better suited to their current circumstances. The rapid increase in homeowners equity due to rising property values in Australia has resulted in a surge of people investigating refinance options. As many as 33% of all loan applications are by people looking to refinance.

Refinancing can be expensive and time consuming due to the amount of red tape involved. Redrawing on an existing loan is much simpler and less expensive, but isn't always an option.

It is extremely important to condider why you want to refinance. Funds that are used to purchase or improve assets are likely to be a good investment. Funds that are used for liabilities like cars, boats, swimming pools or holidays can leave you worse off than you were previously and financing new business ventures has been a disaster for many people.

Be sure to find out what your existing loan(s) is costing you and compare that with whatever refinancing you are offered. Also compare features of the new and old loans and factor in changeover costs."