Navigating the Mortgage Refinance Maze

Navigating the Mortgage Refinance Maze

We asked Grace and Dario Chiodo – our amazing mortgage advisers to help with this article.

There is a lot of talk in the media right now about interest rates and property affordability.

There is also more talk about people refinancing mortgages.

PEXA – a digital property exchange company recently reported new research. The research suggested that more than a million Australians refinanced last year. The survey also pointed to anxiety about rising official interest rates and said almost 2.3 million people were considering refinancing in the next two years.

The Finwell Group team has a highly experienced team who helps customers with refinancing, and we wanted to share some information to help you navigate the refinancing maze. 

We also advise you to keep calm and don’t buy into the media hype that is likely to increase anxiety and panic. It is mostly unhelpful.

Here’s some detailed advice from our team – Dario and Grace – who are known for their helpful advocacy on behalf of clients who are refinancing.

1.What are some reasons to refinance?

Most people refinance to get a lower interest rate and save money. Another good reason is to unlock the equity in your property that you can use to renovate your existing home or maybe buy a second investment property. 

2. When is it a good time to refinance/how often should I refinance?

We recommend a regular review of your existing mortgage or investment loan. This is sound advice at any time for a number of reasons. The first is the market is always competitive and new loan deals and offers are being made available all the time. The second is any increase in your property value can unlock equity and a review or refinance is a good way to take advantage of this situation.

3. What is the benefit of using a broker or adviser like yourself?

When compared to dealing direct with your bank, a broker usually has access to a number of lenders and can provide you with a few options that compare various loans, deals. Often a loan isn’t just about the rate, it can be about other added value things like splitting between fixed and variable, offset accounts, and honeymoon deals. 

4. What is the basic information I should provide you to get the process started?

We’re going to need your income details for the last couple of years in most instances. If you run your own business, then having your financials and tax up to date is advisable. Without going into the full details, these will be the most important information to have available. In your own individual situation, there may be more information we need. Of course, we also need to be able to identify you to the bank or institution we approach to refinance, so passports, drivers licenses and other documents may also be required.

5. How long does the process take?

The time to refinance does vary depending on activity in the market. It certainly isn’t an overnight process, so plan for a couple of months at least to pull together documents, make applications and get approvals. The more time you give the process, the less stress you’ll have so start early. 

6. There’s a lot of talk about rising interest rates at the moment, should I be worried? Can I still get a better deal somewhere else?

Irrespective of the market conditions or interest rates at the time, you should remember that property investment and owning houses is a long-term game. Don’t worry so much about what the media says in their hype – invariably they want you to feel like the world is all doom and gloom. Instead, focus on your plans, and we can definitely help you find a good deal. Banks are always competing for mortgages and switching often brings better loan conditions and a better rate, whether it is from your existing lender or a new one.

One important point is that lenders need to be reputable, so sometimes the cheapest rate is not the best option as the lender is not a reputable lender. On your behalf, we make sure that the lender is reputable with a low rate.

Call Dario or Grace on (03) 9017 3235 or email them at better@finwellgroup.com.au for a no-obligation personal chat about your own goals and circumstances.