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Home Loan Tips from Balmain: James tells you the home loan questions you need to ask
James Candrick
People often come into the Balmain branch of Yellow Brick Road to review and improve their financial situation. We’re always looking for way to save the residents of Balmain money, but one place where people forget to look also happens to be their biggest household expense: their mortgage. And I believe the reason why people don’t look closer at their home loan is because the idea of refinancing seems too difficult, too confusing, or is perceived as probably not worth it for the effort. If you’re one of those people, it’s time to ask yourself some questions.
- What’s my mortgage interest rate? In my experience, many people know what their monthly payments are, but they don’t actually know their interest rate. Do you? Take a look – if it starts with a “4”, you can probably do better and I’d advise shopping around.
- What does the market say? At Yellow Brick Road Balmain we have access to a huge range of mortgages and can easily search through them. The current market for variable rate mortgages runs from high three percent to over six percent. Three-year fixed rate mortgages range from the low fours to well over six per cent. There’s a lot of difference, which means there’s solid scope for savings.
- What could I save? Use the comparison sites to calculate several results. If you have a $350,000, 30-year loan with an interest rate of 5.24 per cent, and you refinanced to a rate of 4.74, you would save $107 a month and $38,480 over the life of the loan. As a mortgage broker, we can easily calculate the savings for your situation.
- What must I have? Have a good repayment record with your current lender and ensure you are not currently in arrears. Also, know that if you’re half-way through a fixed-rate loan you may be charged a break fee to leave, but don’t worry we will factor this into the decision for you.
- What are my other costs? A new lender will likely charge upfront fees, and there may be some costs to exit your mortgage. As a mortgage broker, we don’t charge for the services we provide as we are paid by the lenders for setting up a new home loan.
- Who do I see? Go to a mortgage broker directly as they have access to a whole panel of lenders and can compare hundreds of loans in the one place. Mortgage brokers are refinancing experts who know how to streamline the process.
- How long will it take? Your mortgage Broker will give you a run-down of the process, the application, the documents they want you to provide, and the time it typically takes.
- Is it worth it? At Yellow Brick Road Balmain, my team is here to crunch the numbers and tell you how much you can save. Often, the answer is yes.