Being 100 percent loyal to your current home lender can cost you a considerable sum if you were to consider the course of the loan term. The good news is that, due to the competitive nature of the mortgage market, you can consider switching lenders, and find a better, more convenient loan refinancing solution.
If you hadn’t considered refinancing until now, perhaps it would be high time you did so, since you could end up with a loan refinancing option which fits your needs better.
There are numerous reasons why saying goodbye to your current lender may be an excellent choice. Consider the following grounds:
- Getting a Better Interest Rate
We believe that getting a better interest rate is the primary reason you should think of loan refinancing. Before you proceed and choose a distinct lender, we advise you to approach your current lender and openly discuss the matter. Beforehand, make sure that you research the market to know the current deals so that you know how far to go with negotiating.
The fundamental advantage of staying with your lender is that you can diminish the costs linked to application or exit fees that a new loan would imply. Nonetheless, it goes without saying that if your lender isn’t open to negotiating, you should move on and continue your search.
- Accessing Equity
In the event in which you have managed to build equity in your loan, and you intend to use it as a line of credit, you can always choose an equity line home loan. You can take advantage of this and buy other properties or assets, or obtain funding for renovating or purchasing a new vehicle. An unmatched advantage is that you can buy something with the same interest rate as your home loan.
Note that the main disadvantage to accessing equity is that paying off your mortgage may take longer than anticipated.
- Diminishing the Fees
When you’re comparing distinct loan refinancing options, it’s compulsory to consider the amount of taxes involved. Make sure you measure the application or establishment fees, valuation fees, ongoing fees, monthly and annual fees, redraw facilities and the option of having an offset account.
Nonetheless, even though a loan refinancing solution implies an application or annual fee, this doesn’t mean that you should exclude it from the very start. Our piece of advice is to take the time to evaluate the pros and cons and, afterward, determine whether the extra cost is actually worth the benefits.
- Taking Advantage of Better Customer Service
Considering that not all lenders are equal, some provide better customer service than others. It could be said that this is a sheer indicator of a bank’s commitment to valuing the customer’s mindset and unique specifications. In other words, as a borrower, you ought to ensure that the lender you choose meets your expectations.
For instance, make sure they will guide you through the entire loan refinancing process. Bear in mind that the amount of assistance they are offering is a mere indicator of their standards for customer service.