Refinancing your home loan can be a smart financial decision, especially when good offers are available. However, getting the best refinance deal requires careful consideration and planning. In this post, we’ll share some tips to help you get the best refinance offer.
1. Don't Be Too Loyal
Staying loyal to your current lender may end up costing you more in the long run. As a loyal customer, you may miss out on discounts and other benefits that new customers receive. To avoid this, call your lender and negotiate a better rate or features that can help you save money.
2. Get The Right Valuation
When refinancing, your home will be valued by the lender. If the valuation comes in lower than expected, it may be worth applying with a lender that can provide a better valuation. Contact us for a free valuation and help to choose a lender that offers a higher valuation.
3. Equity Test
Having at least 20% equity in your home can help you avoid paying Lenders Mortgage Insurance (LMI). If you need to borrow more than 80% when refinancing, you will most likely need to pay LMI. Calculate how much equity you have and consider ways to increase it.
4. Clean Up Your Finances
Lenders are now more cautious about lending money, so it’s important to clean up your finances before applying for a refinance. Pay down your credit card debt or revise your credit card limit. Calculate your debt-to-income ratio and prove to your new lender that you’ve been consistent with repayments.
5. Factor In All Costs
Lower interest rates or cashback offers may not be everything, as there could be hidden costs involved in refinancing. Make sure you understand the full picture of the costs involved. You’ll need to pay a discharge fee with your current lender, while application and valuation fees may apply with your new lender.
In conclusion, getting the best refinance offer requires careful consideration of all factors involved. Don’t be too loyal to your current lender, get the right valuation, ensure you have enough equity in your home, clean up your finances and factor in all costs before applying for a refinance. By following these tips, you’ll be well on your way to securing the best refinance deal for your needs.