Debunking refinancing misconceptions

EVERYONE wants to pay off their mortgage as quickly as possible.

Refinancing your loan gives you the opportunity to take advantage of competitive rates and secure a better deal than what you previously had, says Loan Market.

However, common misconceptions can stop people from refinancing.

To make refinancing clear and easy for you, we’ve dispelled these common myths so you can feel confident in your decision making.

When refinancing it is important to understand both the initial costs and long term savings of refinancing.

Tally up how much you can save with your new loan and be sure to take into account all costs you may incur leaving your current loan and getting a new loan, such as, any exit fees, break fees, joining/establishment fees, solicitor fees, registration fees, etc.

By doing your research and understanding what fees you’ll incur, you’ll be better placed to choose the right deal for you.

Speaking of research, looking around for top deals that are suitable for you is crucial, but it doesn’t need to be time-consuming or tedious.

Nor do you have to do it on your own as this is well within the capacity of a mortgage broker.

A broker will help you transfer to the new loan and look after the paperwork.

Generally speaking you’ll need to provide your payslips, loan statements and an estimate of what you can pay each month, so having an organised filing system will help.

Don’t be lured in just by low rates. The myth they are the most important factor of refinancing can mean people ignore a loan’s lack of flexibility, features or conditions such as the low rate not applying to the full length of the loan.

Make sure you’re comfortable with the entire package before making a move.

While refinancing isn’t a quick fix, it can be an excellent way to save money in the long run.