Refinancing your home loan can be rewarding if you’re looking for better customer service, specific loan features or benefits, or a cheaper interest rate.

However, even if you’re looking to simply consolidate debts or switch from a variable to a fixed rate, it’s important to understand that refinancing is not simply a process of ‘tweaking’ your existing home loan. You’re actually taking out a whole new loan contract.

Why advice can be valuable
Reasons for refinancing range from buying a new car or home renovations, through to getting a home loan comparison in order to secure a better deal and reduce loan costs.

If you’re thinking about refinancing your home loan, the advice of your Smartline mortgage broker can be invaluable to help you understand the costs involved – particularly in relation to your unique situation – and, then, tailoring the new loan to suit your needs beyond the immediate future.

The cost will also depend on the loan you take out and the loan you’re paying out with the new application.

For example, if your existing loan has a Professional Package, for which you pay an annual fee, generally speaking the loan amount can be adjusted without attracting an additional fee. However, if you have a basic loan, for which you don’t pay annual fees, usually there are fees to modify the loan – depending on what you want to do.

Also, many lenders offer special deals that aren’t advertised, so it’s always valuable to speak with your Smartline mortgage broker.

Plan beyond the here and now
If you take the time to consider your needs now and in the future, it’s possible to take out a home loan that’s going to work for you long term – reducing the need to consider refinancing your home loan in the coming years.

For example, it may well be that a basic ‘no frills’ loan is going to work very well for you for the next two to five years, but if you plan to have a family, take a holiday or renovate your home, you might find the long-term savings, convenience and benefits of a home loan with a Professional Package far outweigh the annual fee.

Good to know…
It’s also handy to know that each time you submit a home loan application, the lender runs a credit check immediately – regardless of whether or not you’re applying with the same lender or another bank or financial institution.

So, with every application for credit being recorded on your credit file, numerous inquiries over the past six to 12 months can be detrimental to your chances of getting a loan. This is because when you do finally make a genuine application, lenders view excessive applications for credit as ‘shopping’ for credit, which can be regarded by the lender as ‘risky behaviour’.

If you’re just curious about the potential savings or benefits of switching from one lender to another, you can easily make those inquiries with your Smartline mortgage broker – and this is not recorded on your credit file.

Also, if you’re interested to learn more about what’s on your credit file and what this means to you when you do submit a loan application, your Smartline mortgage broker can conduct a credit check on your behalf at no cost and obtain a report instantly.

You can also get hold of your credit report from www.mycreditfile.com.au, but there is a cost involved and it takes some time to be delivered.

Speak with your Smartline mortgage broker if you’re thinking of refinancing your home loan, or visit the Smartline website to find a mortgage broker close to you.