Will I get a good rate?

Refinancing How to access equity in your current home New loans - what to look for MORTGAGE CHOICE. What you need to know Weigh up the rates, over other features and benefits you may need. What's refinancing? AARAAAAMA Refinancing is simply trading in an old mortgage for a new one by moving your home loan to a different lender. What kind of rates are available Basic variable rates 80% Standard variable rates Foed rates for peace of mind OF EQUITY AVAILABLE Why refinance? 560620 / Honeymoon rates, receive a 12 month discount on rates athough some can be longer reduce monthly payments by getting a lower rate Features and benefits consolidate credit cards, personal loans on other debts to get a lower interest rate and reduce overall monthly repayments finance home renovations or extensions by tapping into the equity in the existing home get a home loan with more suitable features such as redraw facility, offset account etc. You can borrow against the equity that you have in your home, which is the difference between the value of the property and what you owe on the home loan. Lenders will typically lend up to 80% of valuation or 90% with Lenders' Mortgage Insurance. MC MR M- M+ V Offset accounts: deposit your salary etc into an account that is linked to your home loan account. Any interest you ean on the money banked is offset against the interest paid on the home loan account Redraw facility: redraw extra payments at any time D 45 6 - CIAC 1 2 3 Professional packages: discounts on your home loan fees, rates, credit card and other accounts 00 V Ability to make extra repayments: make extra repayments on principal without incurring any penalty. What it costs OLD LENDER NEW LENDER Before you refinance consider carefully... • The savings you may make vs fees and charges, including stamp duty and mortgage insurance • Upcoming changes in lifestyle or work like a baby or extended holiday • Trading in useful features such as offset accounts for a lower rate Discharge of Mortgage Fee Approx $350 Home Loan Application Fee Approx $600 STOP Valuation Fee (of the property Usually included in application fee Deferred Establishment Fee $700-$1,000 (f loan cancelled in first 4 yeara Settlement Fees Approx $100 - $300 Break Costs (fixed rate loans) Depends on the size of the loan and current interest rates What people say about refinancing Registration of Mortgage Fees Varies by state government Stamp Duty ột you borow more than your original loan Varies by state government and the purpose of the funds 45% used a mortgage broker to help them refinance their loan Loan - Legal Fees Approx $250 - $500 46% paid no exit fees upon refinancing 45% Lenders' Mortgage Insurance Usually for LVR > 80%. The cost can 89% of respondents had no regrets about their The main motivation to refinance was to be as little as a few hundred dollars or into the tens of thousands 89% NB: Be sure to check fees, as they vary from lender to lender SWITCH TO A CHEAPER LOAN decision to refinance Potential savings 68% saw their interest rate drop upon when they refinanced f www.facebook.comHomaloanCoach On a $300,000 principal and interest loan with an 8.3% p.a. interest rate, you save approximately $50 per month for every 0.25% discount you can negotiate on your rate. 68% BLOG og MortaageCholoe.com.au From Motgage Choios Pafinancers Survay: Survay of 1,028 Australians wha had refinanced their home loan during the 12 montha ta August 2010. $308.57 savings What does it all mean? Establishment Fee A fee charged by a lender to set up a loan. Break Costs $258.36 savings Charged when you pay out a fixed rate loan earty. These charges depend on the remaining tem and current rates at the time you pay the loan out. It also includes an administrative cost incurred in releasing the loan early. Exit Fees $207.64 savings Fee charged by a lender to exit a loan - usually for a fixed rate mortgage. Can be "deferred eetabliehment fee" of "earty repayment fee". Deferred Establishment Fee $156.43 savings A fee charged by a lender when you pay a loan out before a specified period. Lender's Mortgage Insurance $104.74 savings Equity The difference between what you owe on the loan, and the current valuation of the property. A premium charged by a lender when the Loan to Valuation Ratio is higher than 80%, for an insurance policy which covers the lender if the property needs to be sold due to loan default and there is a shortfall of funds to repay the loan. $52.60 savings The amount of an asset not subject to any lender's intereet e.g. property worth $300,000, with a mortgage loan of $150,000 - equity is $150,000. Loan to Valuation Ratio The ratio of the amount lent to the valuation of the security (ie. the property). Commonly called LVR. An example would be a loan of $120,.000 on a home valued at $130,000. The loan to Valuation Ratio is $120,000 multiplied by 100 and divided by $130,000 - 92.3%. $2264.35 $2211.76 $2159.61 $2107.92 $2056.71 $2005.99 $1955.78 Equity Loan (or Line of Credit) It usually operates like an overdraft, where the borrower has a eet credit limit to which they can draw funds and repay at 8.30% 8.05% 7.80% 7.55% 7.30% 7.05% 6.80% any time. www.MortgageChoice.com.au