Saturday, 1 December 2012

Mortgage refinancing guide

The Millionaire on Heels is becoming an expert at mortgage refinancing.  Unfortunately, all I want to do is refinance the mortgage on a single property in which I have a lot of equity and far more than enough income to service the loan.  It should be easy, but the broker and lender I have dealt with predominantly to date have turned the process into a circus over the last few months!

Theoretically, it should be easier to refinance an existing property than to finance a new property.  The process goes generally like this.
  1. Research possible home loans.  There are hundreds of lenders in Australia, each offering multiple loan products, so there are literally thousands of possibilities.  Your initial goal should be to get down to a shortlist of say five to ten products that could meet your needs.  Things to consider include:
    • Bank or non-bank lender – 90% of Australian home loans are sold by the banks at the moment, but non-bank lenders may offer better interest rates and service, depending on your needs
    • Fixed or variable or split loan – fixed rates are really attractive at the moment, but fixed rate products are generally less flexible than variable ones

Upcoming December posts

December is mortgage month for me, as I've been trying to refinance my home loan and hope to get it all (or mostly ...) finalised this month.

And it couldn't be December without some focus on Christmas and New Year's Eve, and of course the end-of-year sales.

So my plan for December posts includes:
  1. Mortgage refinancing guide
  2. Home loan features (and jargon)
  3. The things the banks and brokers don't tell you
  4. To fix or not to fix
  5. Search for the lowest possible interest rate
  6. Banks versus non-bank lenders
  7. Mortgage brokers versus direct sales
  8. Cash back mortgage brokers
  9. Private banking
  10. Mortgage application process