The top questions refinancers should ask a mortgage broker

Are you looking to refinance your current mortgage? If so, it’s important to know exactly what you’re getting into. Refinancing a home loan can be a great way to save money and improve financial stability, but it’s best done with the help of a professional mortgage broker. Before signing on the dotted line, however, make sure that you know all of the questions necessary for successful refinancing — in order to make an informed decision about swapping out one lender for another and potentially finding better terms. In this blog post we will outline some key questions that every refinancer should discuss with their broker prior to engaging in any type of refinancing agreement. Keep reading and get ready to start asking questions!

When time is the enemy and you could use an ally to assist in refinancing your mortgage, a skilled mortgage broker can be invaluable.

An experienced broker can not only save you from the stress and time associated with a lengthy transaction process, but they could also be instrumental in securing an even better bargain for you.

Prior to dialling your mortgage broker, it is vital that you are prepared with the right questions. Make sure you have a clear grasp of what they can do for you and leave nothing off the list when speaking with them!

How can a mortgage broker help?

The primary query you should consider is ‘what advantages can a broker offer me?’ A knowledgeable and reliable intermediary should be able to:

Specify the services you will offer;

• Advise whether it is worthwhile to refinance now (a good broker will tell you if you should refinance at all);
• Outline the benefits of refinancing apart from simply lowering your interest rate and your monthly repayments;
• Explain the costs associated with refinancing;
• Calculate whether Lenders’ Mortgage Insurance (LMI) would mean you’re not actually saving money from refinancing;
• Consider the benefits and restrictions of any loans recommended including penalties for early exit; and
• Explain how refinancing can be suited to your specific goals.

In a nutshell, you want assurance that your broker is not just sending you to the bank so they can collect their commission. It’s essential that thorough analysis be done of your finances in order to determine if refinancing will truly benefit you now and in the future and how much money it could potentially save or earn for you.

For instance, if you just made a house purchase and the market has gone down in your area since then, refinancing might not be an option for you. You may have not acquired enough equity to meet the requirements of lenders that give more competitive interest rates if the loan-to-value ratio (LVR) is lower than 80%.

What perks or benefits can I get out of refinancing?

Refinancing is a popular choice for many homeowners, primarily due to the reduction in interest rate it may provide. But refinancing also offers other advantages that shouldn’t go unnoticed; such as:

• Adding assistance features to your loan, such as an offset account or a redraw facility.
• Reducing your fees with a lower-fee loan.
• Accessing your equity to get some extra cash for anything from a home renovation, paying for a family holiday, or even for a future investment.
• Consolidating debt – You may be able to increase your loan amount to help pay for your existing debts.
• Gaining better customer service – You may find that you now want a tech-savvy online lender that can provide a streamlined app-based service. Alternatively, you may prefer a lender that offers branches for face-to-face service.

What costs are involved in refinancing, and what will my savings be?

Are you considering refinancing your loan to save money? A wise decision! It’s essential to understand the dollar value of those savings, so that you can calculate when the cost of refinancing has been paid off. Ask yourself: what will my lower mortgage repayments be if I refinance now? This question is crucial in determining your break-even costs – and how quickly they’ll add up.

Refinancing fees can sometimes be costly and include application fees, mortgage discharge charges, settlement expenses and break costs if you exit a fixed rate period early. Your broker is there to assist you in finding not only what your savings will total up to but also when those savings may cover the refinancing fee costs.

For those looking to refinance their mortgage, cash back deals are an ideal solution. Cash back home loan lenders often give new customers between $1500-$10,000 with the purpose of providing extra aid during refinancing. This money can go towards reducing fees and making the process smoother overall.

Is this the best loan for me? Or are you just trying to earn a commission?

Rather than paying a mortgage broker for their services, home loan customers usually benefit from the fact that brokers often receive commission payments from banks to showcase their loans as part of a refinancing package.

Ultimately, you are probably wondering how can you be certain that this loan is ideal for *you* and not just the broker? You need to have assurance that you’re receiving a loan tailored to your needs and objectives, with no chance of it being suboptimal or more expensive than necessary so as to provide the broker with an increased incentive.

If you want to answer this question for yourself, instead of asking the broker directly, it would be more beneficial to conduct your own home loan comparison and act as your own broker.

Take advantage of comparison tools to investigate how your current loan compares to other available mortgages. These nifty features allow you to compare the loans side by side and filter down your results to show only those that meet your criteria. You can then research the interest rates, added benefits, as well as potential repayment costs in order to identify if there are superior options accessible for you.

Source: Newsroom