What Fees Do You Have To Pay When Refinancing?
✅Refinancing can definitely save you money in interest if done correctly. But making the switch should come with a measured approach to assessing the benefits versus the costs. Just be sure the savings you make in switching outweigh the fees involved.
✅Your first port of call should always be a mortgage broker who can explain the costs involved in switching loans. As you'll see, sometimes the lower interest rate costs you more. A brief example would be paying the fixed cost break fee versus the weathering the higher interest rate until the fixed term ends.
What are the exit fees of refinancing your home loan?
✅There are no more deferred establishment or exit fees. Simply put: banks can no longer charge an early termination fee.
✅Establishment fees cover the lenders cost of processing the initial loan documents. Most banks charge them, and sometimes there are "offers" where these are waived for a short period of time. Speak to your broker first as sometimes these "waived fee" applications come with a higher interest rate to compensate.
✅Lenders Mortgage Insurance is payable if your deposit is less than 20% of the purchasing price of the property. This is paid again on a refinance - even if you paid it for the initial loan. Speak to your broker first: it may be wise to wait until your LVR is less than 80% to apply for a refinance. Mortgage Broker Revesby will happily help you work this out.
✅Mortgage Discharge Fees are not the same as an exit fee. This is a "settlement" fee and it covers the cost to the lender for the early release.
✅Stamp Duty applies if you are refinancing to borrow more than the initial loan amount. You may be investing in another property or doing renovations, so stamp duty may apply for the difference in the loan amounts. Speak to your broker to learn the different rules in each state. Mortgage Broker Revesby will help you calculate it - no fee.
✅There is a cost for the registration & de-registration of a mortgage so that any claims on a property can be checked by future buyers. These fees can be around $1,000.
What about Cash Back Offers?
✅There are great cash back offers that are offered periodically by some lenders. These are mainly to entice a refinance, however, they have the added benefit of paying the costs of refinancing. And sometimes a little extra for your pocket!
✅Important to have a mortgage broker weigh up the pro's and con's before you take the leap. Mortgage Broker Revesby will outline these - no fee.
No fee service.
matthew@mortgagebrokerrevesby.com.au
www.mortgagebrokerrevesby.com.au
0423 237 242
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