Should You Decide On Fixed Or Variable Interest Rate For Your Home Finance Loan?

Many individuals are not aware that variable interest rates move in another way to to fixed rates and by the time variable rates have bottomed they may have missed one of the best opportunities to secure a fixed home loan rate. Whilst variable interest rates are influenced by the Reserve Bank, fixed rates are very different. Fixed rate pricing is driven by individuals who invest in the fixed rate wholesale markets.

If you are considering fixing your home loan but don’t know when to make the move, the lowest fixed home loan rates are likely to be offered when variable interest rates are between three and nine months off hitting their bottom. Keep in mind that there are often special deals available on fixed home loan rates which may at the same time make this option more inviting to you.

Plenty of people decide on a fixed home loan rate for the assurance it offers over payment amounts, you should consider fixing your home loan when ever the loan terms, conditions and features are well suited for your situation.

It’s crucial that you always take into account your financial situation and motivation for fixing to find out if a fixed rate home loan is the right choice for you, regardless of the interest rate environment at that time.

For those who need certainty of home loan repayments, fixing all or a part of your home loan is undoubtedly a possibility worth taking into consideration. Your Central Coast mortgage broker will assist you to find an appropriate wholly or partially fixed home loan rate with the right structure at any time you need one.

 

Just What Is The Difference Between A Home Loan Redraw Facility And An Offset Account

Attempt to create a home loan buffer into your home mortgage by making extra monthly payments anytime you can. This will give you some flexibility if you do find yourself in short term difficulties. You can do this either by means of making extra repayments, or saving extra cash into an offset account.

A redraw facility on your home mortgage means that you can pay in extra money into the home loan, usually in the form of greater ongoing loan monthly payments which you can withdraw again when its needed.

To put it simply, instead of earning (taxable) interest in your savings, putting your savings in the mortgage will save you money on your interest fees and helps you repay your home loan a lot quicker. Meanwhile, you are still saving money for hard times. The advantage of this kind of loan monthly interest charged is generally cheaper compared to a standard variable rate and it does not incur regular fees. 

Some, but not all, lenders charge a fee to use the redraw feature and/or a charge any time you redraw, therefore these types of costs need to be taken into account. As a result, it’s probably best implemented as a option in order to save funds for a large future purchase, like a new family car, family vacation or perhaps building work, rather then accessing money from it all the time.

These types of loans are suitable for low to medium salary earners who will set aside that bit of more every month.

With an offset account, the balance is going to be offset against your mortgage loan. Earnings is transferred into your Offset Account so you use the Offset Account for all your EFTPOS, cheque, internet banking, and credit transactions. Whatever is in the Offset Account after that will come straight off the mortgage, or 'offsets' the mortgage amount for interest.

As an example, should you have $10,000 in your offset account against your $300,000 home loan; you actually pay just interest earned on $290,000. The more income you retain in the offset account, the extra interest you save on the loan. In effect you are generally not earning interest earned on your savings, but are generally benefiting as what would be interest on savings is actually calculated on a decrease on your home loan.

Your offset account may also be used because a savings account for a major purchase, or is often used by people to ‘park’ cash which they might need to readily obtain down the road - as an example, a couple starting a family some time in the next few years might take a look at this option.

These types of loans are suitable for people on medium to high income earners, as well as disciplined spenders as the extra funds put in the offset account the sooner you pay-off your loan.

To read more on how a redraw facility or an offset loan could benefit you, contact our fully qualified and expert home loan team at Central Coast Mortgage Brokers, they can help to find you a mortgage loan which includes a great low interest rate, and also fantastic loan features and benefits.

 

Why Do Homeowners Decide To Go For A Home Loan Refinance?

Gone are the days where home buyers stayed with their original lender for the duration of their home loan. Shopping around for reduced repayments, better interest rates, home loan offers or even better service is what a lot more people are now doing. There are many benefits to refinancing your home loan, however you need to look at your needs carefully and to clearly examine potential benefits and also disadvantages.

 

Typical advantages for refinancing

Your home loan may not be the one which is best for your needs, especially if your needs have changed since taking it out. Or you want to get rid of other debt (like credit card balances, car lease or personal loans) by using equity in your own home. Secured home loans in general charge cheaper interest rates so that you can decrease your overall monthly repayments.

If you previously paid an increased rate through not satisfying normal financial conditions, your position may now have improved and you could possibly save interest by just moving over to a standard home loan. On the other hand, you may not be pleased with the services or loan access options you are currently getting. Rate competition and fees can be a major factor. There's a chance you will be able to obtain a more competitive offer from another lender.

 

What is the cost of refinancing?

Check out what your current mortgage lender will charge for exiting from your current loan term and what exit fees apply. What will another mortgage lender charge to establish your home mortgage? Their charges will include a revaluation of your home in addition to loan settlement fees.

Home loan stamp duty and registration fees do not usually apply when refinancing your mortgage loan, but be sure to check. If you intend to borrow greater than 80% of your property's valuation, you will need to pay Lender's Mortgage Insurance. This can be considerable so once again be sure to check.

 

Which one offers you the best option?

If you are satisfied with your current lender's services, discuss your home loan requirements with them first; they are often in a position to help and you could eliminate exit and establishment costs. For details about alternative lenders, check out the Internet, home finance publications, classified ads or telephone and check out prospective lenders direct.

 

What about the paperwork?

Refinancing your home loan will need some time and effort to make sure that you get the best new loan for your needs and lower your costs. You will have to get your supporting documentation together, to verify your earnings, your repayment record, property information and so on. An organised strategy can certainly make the whole process much easier with a whole lot less hassle.

For more help and advice on home mortgage refinancing consult a home loan professional.

 

Fixed And Variable Rate Home Loans - Which One Is Better?

Many individuals are not aware that variable rates move in a different way to fixed rates and by the time variable rates have bottomed they have missed one of the best chances to acquire a fixed home loan rate. While variable interest rates are encouraged by the Reserve Bank, fixed rates are very different. Fixed rate pricing is usually driven by those who invest in the fixed rate wholesale markets.

For anybody who is thinking of fixing their home finance loan but don’t know when to make the move, the best fixed home loan rates are usually out there when variable interest rates are somewhere between three and nine months away from reaching their bottom. Remember that there are normally specials available on fixed home loan rates that may at the same time make this alternative more inviting for you.

Plenty of consumers decide on a fixed home loan rate for the confidence it offers over installment amounts, you should consider fixing your home loan any time the loan terms, conditions and options are ideal for your circumstances.

It’s important to always think about your financial predicament and motivation for fixing to determine if a fixed rate home loan is the correct choice for you, whatever the interest rate environment at the time.

For those who require certainty of home loan repayments, fixing all or part of your home loan is certainly an option worth taking into consideration. Your Central Coast mortgage broker will help you to find an appropriate wholly or partially fixed home loan rate with the right structure anytime you require one.

Exactly What Is The Difference Between A Home Loan Redraw Facility And An Offset Account

Try to create a buffer into your mortgage by making additional repayments whenever possible. This will give you some leeway if you do find yourself in short term difficulties. You can do this either by means of making increased installments, or saving extra cash into an offset account.

A redraw facility on your home mortgage allows you to put extra money into the loan, ordinarily through larger ongoing home loan payments that you may withdraw again when you need it.

In other words, rather than generating (taxable) interest through your savings, putting your savings on the loan will save you money on your interest costs and makes it possible to repay your loan quicker. Meanwhile, you are still saving money for hard times. The main benefit of this kind of loan interest rate charged is generally much less expensive compared to a standard variable rate and it does not incur regular charges.

A few, although not all, lenders charge a fee to activate the redraw facility and/or a fee any time you redraw, thus these types of costs must be taken into account. As a result, it’s probably best used as a service in order to save funds for a large future purchase, such as a new motor vehicle, holiday or perhaps renovations, instead of obtaining money from it all the time.

These types of loans are usually best for low to medium salary earners that can put away that little extra every month.

By having an offset account, the balance is going to be offset against your home loan. Earnings is paid into the Offset Account so you use the Offset Account for any EFTPOS, cheque, online banking, and credit transactions. Whatever is in the Offset Account then will come straight off the mortgage, or 'offsets' the loan total for interest.

For instance, if you have $10,000 in your offset account against your $300,000 mortgage; you really just pay interest earned on $290,000. The extra income you retain in the offset account, the extra interest earned you will save on the mortgage. In effect you are usually not earning interest on your personal savings, but will be benefiting as what will be interest on savings is going to be calculated on a reduction on your home loan.

Your offset account can also be used as a savings account for a major purchase, or is sometimes used by people to ‘park’ money which they may need to easily access in the future - for instance, a couple starting a family some time in the next few years might take advantage of this option.

These types of loans will be suited to people on medium to high wage earners, as well as disciplined spenders because the extra income put in the offset account the quicker you pay-off your home loan.

To find out more on how a redraw facility or an offset loan could help you, talk to our professional and expert home mortgage advisers at Central Coast Mortgage Brokers, they will help to find you a home loan with a great low interest rate, and also fabulous loan options and benefits.

Why Do Homeowners Choose To Get A Home Loan Refinance?

Gone are the days when home buyers stayed with their original mortgage lender for the duration of their home loan. Many currently shop around for lower monthly payments, a lower rate of interest, additional loan choices or better services.

There can be lots of benefits to refinancing your home loan, but it is important to look at your position properly and to clearly review potential benefits as well as disadvantages.

Usual advantages for Refinancing.

Your home loan may not be the one that's most beneficial for you, particularly if your needs have changed since taking it out. Or you need to consolidate other financial obligations (like credit card balances, car loan or personal loans) simply by borrowing against the equity in your own home. Secured home loans in general charge lower rates of interest in order to reduce your overall monthly repayments.

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For those who up to now paid a higher rate through not meeting normal lending conditions, your position may possibly now have improved and you could save interest by shifting to a standard home loan.

Alternatively, you may not be happy with the service or loan access solutions that you are now getting. Rate competition and fees undoubtedly are a huge consideration. You might be in a position to get a much more affordable deal through another lender.

What is the cost of refinancing?

Check what your current lender will charge for exiting from your current loan term and what exit fees apply. What will your new lender charge to set up your home mortgage? Their costs will include a revaluation of your property as well as loan settlement charges.

Home loan stamp duty and registration charges do not ordinarily apply if refinancing your home loan, but be sure to investigate. If you intend to borrow more than 80% of your property's value, you will need to pay Lender's Mortgage Insurance. This may be substantial so once again do not forget to check.

Who offers you the most effective option?

If you are happy with your current lender's service, go over your home mortgage requirements with them first; they might be in a position to help and you may eliminate exit and establishment fees.

For details about other lenders, browse the Internet, home finance publications, newspapers or phone and check out prospective loan providers direct.

What about the paperwork?

Refinancing your home mortgage loan will involve some time and effort to ensure you receive the most effective new loan for you and lower your costs. You will have to get your supporting paperwork together, to confirm your income, your payment history, property particulars and so forth. An organised strategy will always make the whole process much easier with a lot less stress.

For more help and advice on home loan refinancing talk to a personal mortgage adviser.