REFINANCING – IT’S EASIER THAN YOU THINK

Time to refinance your mortgage?

With rising interest rates and no apparent respite in sight, could it be time to refinance your mortgage? The uncertainty regarding interest rates moving forward can be daunting and stressful. Refinancing is easier than you might think and could save you thousands of dollars in the short and long term.

Things to consider

• When your current fixed-term interest rate expires (or expired)?
• What terms were there regarding the bank’s cash contribution?

Most banks require you to continue lending from them for three to four years as a condition of their cash contribution. If you switch lenders before this period, you may have to return some or all of the cash contribution to the bank. We recommend you check your loan documents or consult with your current lender to confirm this before proceeding with any refinancing.

Why settle for the first offer?

From our experience, when a borrower’s fixed interest rate period expires, they most commonly, just contact their current lender, request a fixed-term interest rate, and sign the lender ‘re-fix’ documents accordingly. But, where any cash contribution ‘lock-in period’ has expired, there is the opportunity to negotiate with your existing lender at this time to try and get a better re-fix rate than their current standard rates and/or even a further cash contribution.

We highly recommend that you shop around to find the best deal possible. The easiest and most efficient way of doing this is to use a mortgage broker. You can of course use any broker you choose, but if you aren’t sure, here are some we can recommend:

• Dawn Whiteside of Loan Market 
• Jill Burns of NZHL (NZHL Mortgages Only)
• Dharmesh Lala of MoneyBox
• Jann Booth of Vegalend
• Bernie Upton of The Home Loan Shop
• Brendon Ojala of Velocity Finance 

Advantages of Having a Broker

Mortgage brokers will help take the stress out of the process and do all the comparisons for you. They can also provide advice regarding your short and long-term mortgage repayment goals and how they can be best achieved. You may find that, not only can you get better fixed-interest rates, but also higher cash contributions.  We have routinely seen cash contributions of up to 1% (or higher) of total lending on home loans. On a mortgage of $500,000 you could be seeing up to $5,000 back as a cash contribution. This often means that the cash contribution covers the legal fees for the refinance and leaves plenty left over for some extra spending, as well as potentially saving thousands of dollars in interest.

Refinancing

The final step is where we at Wakefields Law come in. Once you have an offer of finance that you are happy with, Wakefields Lawyers will handle the rest. We offer competitive pricing for refinancing and make the process fast and easy. All you need to do is sign a few forms and your refinancing can proceed.

Before making any final decisions, you will know:

• The cost of refinancing
• The amount of cash contribution offered
• How much you will save on interest

You will be able to perform a simple cost benefit analysis before making any final decisions on proceeding with the refinance. What do you have to lose? If you’re thinking about refinancing and want to know more, give our friendly team at Wakefields Lawyers a call on (04) 970 3600 or email info@wakefieldslaw.com.

– Tom Speight (Solicitor)