Get Maximum  COVID-19 >> Stimulus Package <<  For Your Business.  Learn More  or  FREE Call 1800 940 521

Oyster Hub | Refinancing Traps to Avoid

Refinancing Traps to Avoid

By Vik Naidu

Blog Post (27)
  • Whether you’re after lower repayments or want to tap into the equity sitting in your home, refinancing can offer a world of benefits. Here are some things to be aware of so that you don’t find yourself hooked into a bad deal.

     

    Don’t be fooled by the interest rate

    Finding a lower interest rate doesn’t necessarily mean you’ve scored yourself a better deal. In fact, a product with more features may cost you a bit more in fees or interest, but could save you more in the long run. Including features such as an offset account will prove valuable as it will allow you to make larger repayments or put any extra cash against the loan. Products without this feature may charge a fee for early repayments.

     

    Honeymoon rates

    Don’t be lured by offers with discounted introductory rates unless you’ve calculated the savings over the life of the loan. While a loan with a discounted interest rate seems a tempting offer, it’s only temporary. Once the introductory period is over, the interest will revert to a higher standard variable for the rest of the loan term. It may be more beneficial financially to negotiate a lower interest rate without an introductory discount.

     

    Be aware of the fees

    One of the main purposes of refinancing is to lighten the financial burden, however, that doesn’t mean that it’s not going to cost you. There are many fees involved, which may include discharge and application fees, a valuation fee, land registration fee, and mortgage insurance. You may also be subject to stamp duty depending on what state your property is located in. While these cannot be avoided, you have to ensure that the costs involved are not higher than the savings, to make the process worthwhile.

     

    While there are traps to avoid, a little expertise can take the stress out of refinancing to save you thousands for you to do things you actually want to do!

Related Article

Adarsh Dutt portrait image
Adarsh Dutt
Strategic Business Accountant
I am highly passionate about helping small business owners save more time and money through automating lazy accounting tasks using cloud-based accounting technologies so you can spend time with your family, fulfil your passions and do the things you love!


Need help with your Business & Finance?

Sign Up for Our Latest News

Get in Touch (02) 9158 5444

Something went wrong. Please check your entries and try again.

Social Share

Scroll to Top