People often think refinancing costs might be expensive – it’s not true if you work with a professional.
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If you work with an experienced Mortgage Professional, they can simplify the process and guide you through the transaction.
They will also take care of all the paperwork and explain any fees or charges before you sign for a loan.
Some of the potential fees are outlined below:
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Banks and other lenders are NOT allowed to charge exit fees
Mainstream banks, second tier lender and even private lenders are NOT allowed to charge exit fees on loans taken out after 30 June 2011.
If you got your loan before 1 July 2011 your lender will be able to tell you any kind of exit fee may apply on your loan.
However, if you have a fixed rate loan, this is an exception and you may need to pay a break fee.
An Establishment fee may also be known as ‘up-front’, ‘start-up’, ‘application’, or ‘set-up’ fee.
This fee is a one-off payment that generally comes out of the funds you receive when you start your loan.
Because of this, it’s normally advised to add this deducted amount to the loan itself so you get the full amount you require.
Lenders Mortgage Insurance (LMI)
Lenders mortgage insurance is a type of insurance that Lenders take out (but the borrower pays for).
LMI protects the lender in case the borrower isn’t able to repay the loan.
LMI only applies if there is less than 20% equity in a home being used as security.
If you paid LMI on your existing loan, before refinancing, you will need to be sure that there is more than 20% equity in your property, to avoid paying LMI again.
This is why it’s best to have at least a 20% deposit if possible.
Ongoing fees can sometimes also be known as administration (admin) fees, line fee, monthly fee, annual fee, compliance fee etc.
They could potentially be a monthly charge or a fee that applies to a specific service.
Not all Lenders charge ongoing fees.
Choosing the right loan for you and your situation
Your DFS mortgage professional will discuss your situation with you and work out your requirements for a loan.
You may simply be after the best interest rate, or maybe speed of transaction and settlement is a higher priority etc
We will work with you to place you and your loan with the best lender to benefit your unique situation.
We will then present you with a comparison sheet of at least three loan products that meet your requirements.
Our loan comparison sheet is set out to allow you to easily compare loan features.
You will see fees (if applicable), interest rates, comparison rates and other important information.
Your DFS mortgage professional will also explain the advantages and disadvantages of refinancing.
We will help you so you are able to make the best decision for what is best for your and your family.