With interest rates on the rise, many homeowners are re-accessing their current loan/s to source a better deal, or they are changing the structure of the loan to reduce their monthly repayments.
When choosing a home loan, the easiest way you can make a wrong decision is by not knowing all your options and not asking enough questions.
Listed below is a guide to some questions that you should be asking your lender before refinancing:
• Am I being offered the most competitive rate in the market?
• What are all the additional fees associated with the loan?
• Are there exit penalties should I want to change the loan?
• Can I make extra repayments at any time without any penalties?
• Can I have a redraw facility or line of credit attached to the loan?
• Are there costs associated with a redraw facility or line of credit?
• How is my interest calculated?
• How often can I make repayments?
• If I am ahead in repayments, can I pause my regular payments?
• Do early repayment fees apply?
• How are repayments calculated?
• When is interest charged?
• What happens to the loan at the end of the fixed term?
• What are the exist fees or switching costs?
• If I am late with my repayment, is there a penalty?
• What would my repayments be if the interest rate increased by 2-5%?
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