In order to select the right loan for you, many criteria come into play to ensure you are choosing the right option. Ask yourself...
If you are planning to sell your property in the short term, future refinancing can still be viable. However you should consider getting a variable rate loan. A fixed rate loan may have higher fees when switching from one lender to another. It will, in addition, have you fixed at a rate for a set period, whereas the variable rate provides more flexibility in moving lenders mid-way through your contract.
Before applying to refinance, investigate what features are important to you to help achieve your objectives and financial goals. Some loans offer the ability to have a break from payments if you are having some time off work, or the ability to withdraw from your home loan. You can have the ability to pick and choose what features suit you so prioritise what carry the most importance.
There are lots of lenders out there who offer a wide variety of loans. The more traditional banks will offer loans at a slightly higher rate and stricter borrowing criteria although have higher reliability and better in-store and online service. However, smaller banks and online lenders could have more discounted rates, less vigilant acceptance criteria, along with the trade off of little or no in-store service.
A lot of people will jump straight into a home loan, having only looked at the rates. In more cases than not, the service fees will escalate quickly and may take you by surprise. Before signing up with a lender, check the fees that accompany each loan in order to be prepared and budget your repayments, also allow for one off occurrences. Lenders usually offer a lower rate with higher fees and vice versa – so find your mid point.
For more information see our Home Loan Refinancing Guide
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