Refinance – What’s the Point

[Adam from Vista Financial]

What is it?

 

Basically refinancing is taking your existing mortgage to another bank or lender.

 

Why do it?

People have varying reasons for refinancing although the main one seems to be to get a better deal. Others are simply unhappy with their current bank.

 

How much could I save?

 

Let’s use a loan of $400,000 as an example with 25 years remaining. If the current interest rate was 4.5% your monthly repayments would be approximately $2,223.

 

If this loan was refinanced to another lender with a rate of 3.75% (which is currently available) the monthly repayment would be approximately $2,057.

 

That is a difference of $166 per month or $1,992 per year.

 

Keep in mind also that extra $1,992 per year is making profit for your current lender.

 

How do I refinance?

 

Speaking to a broker would be a good first step. They can let you know if your current rate is competitive and if it will be worth refinancing. The best thing about it is a broker will usually not charge you a fee as the bank will pay the broker for their work.

 

If refinancing looks to be a good option then the broker will do all the leg work. You will just need to provide the documents to the broker that the bank request (payslips, bank statements etc).

 

Many lenders offer ‘Refinance Rebates’ where you could be reimbursed for your refinance costs. Generally we allow between $750 - $1,000 for refinance costs. Currently there are lenders offering rebates of $1,250 so this should more than cover any cost involved.

 

We regularly perform ‘Mortgage Check Up’s’ for our clients and are happy to extend this offer to Poms in Adelaide members.

Edited September 1, 2016 by Adam from Vista Financial

[tonyl]

Hi Adam

 

I posted a thread yesterday looking for some feedback on third party commercial lenders and wondered if you could help with any info you may have as you are already working for a finance provider?

 

I am emigrating with my family and will be arriving in Australia very early next year and need to conduct some initial commercial research in preparation for starting a business once settled.

 

 

 

Based upon the business model used in the UK, I would like to make contact with any companies in Australia who are providers of personal loans for people who choose to finance a product/service purchase with repayments over a fixed term, like a 2/3/4 year period.

 

 

This would not include regular banks (not a mortgage or refinance), where people can arrange their own loans through their own personal bank account but more along the lines of where the company who is selling the product or service (my new company) can offer the customer the option to pay for their purchase on a financed basis through a third party finance provider... for example;

 

 

If an individual wanted to buy a new car or carry out home improvements such as installing new replacement windows or a new kitchen or new bathroom etc. and the seller of the items offers the buyer the option of paying for their purchase over time but then uses a 'finance provider' to facilitate the loan (purely acting as the broker/introducer of the loan).

 

 

I'm pretty sure they do exist but I would like to ascertain for certain that these sorts of companies do in fact operate in Australia and if so, who they are?

 

 

Any company names, website, feedback or suggestions really would be appreciated.

 

 

Many thanks

tonyl

[Adam from Vista Financial]

Hi Tonyl,

 

Thanks for the question.

 

I have just seen on Poms in Oz that you have had a reply which seems to fit what you are looking for.

 

Best of luck.

 

Adam.