Yikes, it’s nearly half way through the year and depending on your job you might not be thinking too heavily about June 30, but it is a good excuse to sit down and quickly review your situation. You may have read in the paper lately about the mortgage wars, and it is true there are banks out there offering up to $1,500 in cash rebates to refinance your loan to them and with rates well and truly into the 3’s it could be worth your while to stop and think about.
We’ve recently had a few situations where we have been able to save people literally thousands, and cut years off people’s mortgages by refinancing to another bank. This week for example, we helped a new client refinance to a new lender (he had been with the same bank for over 10 years and unfortunately in banking, loyalty doesn’t pay). He was previously paying 4.66%, we negotiated a new bank down to 4.17% and got a cash rebate of $1,250 to be paid on settlement to cover switching costs. Overall this translates to a saving of $250 per month, or $74,350 over the life of the loan and most importantly allowing him to pay the loan off 2 years quicker!
So aside from chatting to the team at Red & Co, here are some of our top tips to get you through the end of financial year in 2016!
New Year, New Opportunity
It’s time to review the past year and look at what you can do to improve on the coming year. Use the new financial year as an opportunity to investigate how you can do things differently – even small changes can make a big difference from year to year. As you can see above if your bank hasn’t been looking after you, then it might be time to move on because putting $74,350 back into your pocket is much better than leaving it with the banks!
Just like doing your homework, being proactive and asking questions to your broker or lender is extremely important to ensure that you are not missing out on any opportunities. Consider asking your broker questions like how often they reassess your loan, and what that involves. Ensure you keep track of this timeframe and record a prompter to follow up it up too. At Red & Co we offer our clients annual reviews of their facilities because we recognise the finance market is continually changing and what might have been the right product a year ago may no longer be suitable.
Take this time to review the work your broker or lender has done this year. It is important to ensure that you and your broker understand each other so that they know your goals for both the short and long term too.
If you do not feel your broker or lender is working hard enough for you, chances are – they aren’t! If that is the case and you decide to make a change, always ensure that you choose a broker with solid experience and the relevant qualifications, read reviews and look at the lenders they have access to; ensuring they have access to both big banks and credit unions, along with smaller institutions.
Take your Mortgage Seriously
In most cases, a mortgage is the biggest expense people have. The variance you can achieve by refinancing can make for significant savings over the life of the loan. Ensure you have your loans structured properly for accounting purposes – a good example of why it is important to work with the right finance specialists who personally understand your situation, because as we can see above, complacency could be costing you tens of thousands of dollars over the life of your loan.
With these four tips, you can revise your current loan and ensure that your assets are being managed in the best hands. Use EOFY as an excuse to improve your current position, so that you will progress moving forward this financial year!
If you would like any financial advice or information about refinancing we would love to help, contact your friendly finance team at Red & Co on 1300 88 73 28 or use our contact form here.