Struggling to meet the obligations that your current home loan has tasked you with? It happens. Often the bank will change the way it operates, or you find that what suited you when you first applied no longer suits you now. A home loan is a long-term investment, and sometimes you may wish to switch providers while your loan is still active. To do this, you’ll have to pay extra fees. However, depending on your unique situation, you could still save money this way, so be sure to do your homework before switching lenders.
Drop Your Interest Rate
The main reason that people wish to move their home loan to another bank or lender is to get a drop in interest rates. Although this is often possible, be wary of lenders that offer no interest rate or an incredibly low one. Most often the hidden costs of these are built into the monthly fee, which means that you’ll end up paying more than your original interest loan.
Notice Period And Break Up Fees
Most home loans will have a notice period built into them. Be sure to read your documentation carefully, and talk to a loan professional. Blackbox Finance has loads of relevant information regarding notice periods and other small print. A break-up fee is common as well, because the original lender will miss out on future interest from you. This is how they recover some of their losses should a borrower move their home loan to another bank.
Be Sure To Compare Apples With Apples
When deciding on whether you should move your home loan to a different bank, be sure that you compare your existing product with a similar offer. You should have a good knowledge of how your particular home loan works, and what the differences will be with your new bank – if any. If your new deal doesn’t offer anything besides a slightly lower interest, which may be included in the fees anyway, then switching banks may not be worth the trouble.
Blackbox Finance your trusted Mortgage Broker servicing Palm Beach and the surrounding areas has several years of experience in all aspects of home loans. Be sure to have a look at our site or contact us on 1300 70 12 17, fill in the form below or send a quick email to [email protected] with any questions you may have.