FINANCE

GEMMA HAY

Area Manager Mobile Lending P&N Bank

FINANCE

Are you considering refinancing your home loan?

REFINANCING YOUR HOME loan, or switching as it’s sometimes referred to, can save you thousands over the life of your loan.

Make sure you consider any upfront and ongoing costs associated with exiting your current home loan and switching to a new loan, such as the settlement, loan establishment, exit and mortgage registration fees and charges.

While finding a lower interest rate is the most common reason for making the home loan switch, refinancing is also a great option if you are looking to consolidate debt, access equity for renovations or buy another home.

We have broken down the steps to find out whether refinancing could be the right choice for you and how to go about finding a new home loan.

STEP 1: WEIGH UP THE PROS AND CONS

Before you refinance, it pays to do your research. Weigh up the savings you will make over the life of your loan versus the cost of switching.

Make sure you consider any upfront and ongoing costs associated with exiting your current home loan and switching to a new loan, such as the settlement, loan establishment, exit and mortgage registration fees and charges. Also consider the flexibility of repayments, whether you will need Lenders’ Mortgage Insurance (LMI), how long you will need the loan for and whether you are protected against sudden rate rises.

Even though you may decide not to go ahead with refinancing, taking the time to regularly review your loans to make sure you are getting a good deal is an important part of keeping on top of your finances.

STEP 2: DETERMINE WHY YOU WANT TO REFINANCE

There are a number of reasons you might look to refinance, such as: • The flexibility to increase or decrease your repayments • Your fixed term rate is about to end • Your circumstances have changed • To lock in a low interest rate • To consolidate your debts • Tapping into the equity in your home to do renovations or buy an investment property.

Knowing why you want to refinance will help you or your mortgage broker figure out which product and lender is right for you.

STEP 3: COMPARE HOME LOANS

The next step in your refinancing journey is to compare home loans to find the product that’s right for you.

A few things to consider are: • Do you need flexibility in your loan? This may impact whether you choose a variable or fixed rate product, or a split loan that has both. • Are you looking for a credit card?

Some home loan products come with a credit card, but you’ll need to make sure it meets your needs. • Do you require an offset account? Not all products come with an offset account and you can be charged fees if you do decide to go with this product.

If you’re not going to be maintaining a large balance in an offset account, you can sometimes benefit with going for a basic home loan that has no frills but offers a lower interest rate.

We can help you with all these options and more, so if you need advice or have questions get in touch.

STEP 4: MAKE THE SWITCH

Now that the hard work is done, it’s time to make the switch by contacting your preferred lender or broker.

If it’s P&N Bank, we can come to your home or office and walk you through the details of your home loan selections to ensure you fully understand the potential benefits of each loan and any costs. Or you can drop into a branch.

Once your application is approved, we’ll pay off your previous home loan and your new one will begin.

Want to know more about refinancing your loan?

Our dedicated WA Police Force Employee Home Loan Relationship Managers Ross Inglis (south) and Jessica Nguyen (north) continue to be available seven days a week to help you.

VISIT P&N BANK’S POLICE WEBPAGE …

… for contact details or for more information on the special Banking Package available to you.

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