If you could save thousands of dollars every year by simply switching lenders today, why wouldn’t you? After all, your bank isn’t going to call you up once a year to tell you that their competitor down the road is offering a better deal than they are – that just wouldn’t make any commercial sense.
Whilst a refinance may be able to save you money on your mortgage – you also need to be aware of any potential costs involved in the refinance process.
In most instances, the costs to refinance are minimal – generally in the $500-$1000 range, however this can vary dramatically from one lender to the next. Many lenders do offer incentives and switching bonuses, or simply just have a far lower rate than what you may be on.
As an example, if the switching cost was going to be say, $700 – and you were going to save $300 per year, then you might not really feel it is worth the trouble. But on the other hand if the savings where $2,000 per year, $5,000 per year – even $10,000 per year (yes this can really happen in some extreme cases) then the refinance pays for itself several times over, and puts more money back in your pocket every month to enjoy life!
This is why it is important that you review your mortgage at least once a year. This doesn’t necessarily mean you’re going to switch lenders every 12 months – that would overkill, but having a conversation with your mortgage broker certainly won’t hurt and may save you in the long run.
Generally, the initial conversation only takes 10 to 20 minutes of your time, and can done over the phone – or face to face if you prefer. From there a mortgage broker can usually tell pretty quickly if there are sufficient saving by considering alternative lenders. If not, then at least you’ve affirmed that you’re on the right track – if there are savings to be had, then you save – you really can’t go wrong.
It’s also an opportunity for some forward thinking. Perhaps you’re planning a holiday, an early retirement, home renovations or investing in property – the review provides the perfect opportunity to start some early planning towards these goals.
The lending market changes on a regular basis, mortgage brokers have become great advocates in taking a pro-active approach to managing your home loan. Spending 20 minutes once a year to review what other offers exist, could save you thousands of dollars to enjoy later in life – or, at the very least – offer you peace of mind that your existing home loan is working well for you.
If you would like a complimentary review of your mortgage then speak with our experienced team of mortgage brokers today!
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