Top Mistakes to Avoid When Refinancing Your Home Loan

By Deltos Finance on August 29, 2023
refinancing-loans-tips-min

Say you’re on the brink of refinancing your home loan. The potential benefits are alluring — lower interest rates, better terms and a chance to tap into your property’s equity. But amidst the potential benefits, there lie the pitfalls, ready to entrap the uninformed. Whether you’re a seasoned homeowner seeking better terms or a first-time refinancer, understanding the nuances of refinancing is paramount. Today, we’ll share the top refinancing mistakes to avoid so you can get the most out of your new home loan. Plus, we’ll give insights on how Deltos Finance can help you steer clear of such pitfalls.

Neglecting the Research Phase

Just as you wouldn’t invest blindly in a venture, diving headfirst into refinancing without proper research can lead to missed opportunities. The refinancing landscape is rich and diverse, with multiple options tailored to varying needs. 

When you rush or neglect the research phase, you might overlook competitive interest rates, favourable terms or better deals. But don’t fret. Deltos Finance’s philosophy of careful financial consultation underscores this step. We’ll meticulously evaluate loan options to ensure they align with your unique financial journey.

Ignoring Your Credit Score

Your credit score is the gateway to favourable interest rates and terms. No wonder ignoring it has become one of the top refinancing mistakes many people make. 

Monitoring your credit score is a crucial preliminary step when refinancing your home loan. A poor credit score might limit your refinancing options or lead to higher rates. Deltos Finance’s commitment to education and guidance stands tall here, echoing the importance of credit awareness and the measures you can take to improve it before making any refinancing decisions.

Overlooking Closing Costs

The promise of lower interest rates can be truly persuasive, but it’s crucial to remember that refinancing may come with more expenses than expected. Just like when you initially purchased your property, refinancing involves additional expenses. These costs can include break fees, application fees, legal fees and other administrative charges. When refinancing, you may face fees for closing one mortgage, plus additional fees for implementing your new mortgage. It’s important to ensure the cost savings inherent in the refinance outweigh the costs of refinancing. Overlooking these expenses can disrupt your carefully laid budget calculations. 

Deltos Finance’s informative approach ensures you’re well aware of all potential costs, empowering you to make decisions with accurate financial planning in mind. We also ensure refinancing is going to put you in a better financial position. With our guidance, you can avoid one of the pitfalls of refinancing your mortgage.

Fixating on Interest Rates Alone

Yes, interest rates are undoubtedly vital, but fixating solely on them can be a tunnel vision approach. Other critical factors, such as loan terms, fees, flexibility and features need equal attention. So you should weigh in on all the factors, including the pros and cons of refinancing a home loan, before deciding to proceed. 

While interest rates are an important aspect to take note of, they’re certainly not the only aspect nor should they be the deciding factor. For example, the home loan on the market with the lowest mortgage rate might come with high monthly fees that could end up costing you more overall than if you’d chosen a loan with a higher interest rate. 

Unsure how to deal with all the critical factors? Deltos Finance’s holistic approach ensures you consider a comprehensive set of factors when evaluating refinancing options. An adept assessment of these things can lead to a more informed and well-rounded decision.

Disregarding Future Plans

Refinancing isn’t just a present decision; it’s a stride toward your financial future. Ignoring future plans might mean you get locked into a new home loan structure that doesn’t align with your long-term goals. Be sure to factor in upcoming life changes, career prospects and potential investments. You can count on Deltos Finance’s local mortgage brokers to guide you to think beyond the immediate, helping you choose a refinancing option that matches your evolving financial roadmap.

refinancing mistakes

Rushing Through Documentation

The paperwork involved in refinancing can be intricate. Rushing through this step due to impatience or haste can result in missed details or even errors with far-reaching consequences. Deltos Finance’s commitment to ensuring seamless loan processes echoes strongly in this area. Engage with our Hobart mortgage brokers, and you can count on a meticulous approach to documentation that reduces the risk of errors and ensures the refinancing experience remains as smooth as possible.

Getting Swayed by Cash-back Offers

Cash-back offers might seem like an attractive proposition, but it’s crucial not to let them cloud your judgement. These offers can sometimes come with higher interest rates or unfavourable terms, nullifying the perceived benefits. But fret not, as Deltos Finance is here to help you evaluate the overall value of such offers. With our expert guidance, your refinancing decision won’t be swayed solely by short-term gains.

Not Getting Expert Guidance

In a world brimming with information, not seeking help from an expert can be a major refinancing mistake. For instance, here at Deltos Finance, we have tons of blogs that may help answer some of your questions & concerns. Also, you can reach out to us for expert guidance and leverage our local real estate market knowledge. With one of the highest home loan approval rates across mortgage brokers in Australia, we’re equipped to point you in the right direction. 

Summing It Up

Refinancing your home loan isn’t just a financial decision; it’s a strategic manoeuvre. By sidestepping these common refinancing mistakes, you’re arming yourself with the wisdom to make choices that align seamlessly with your financial goals. And as you tread the path of refinancing, remember that in the heart of Hobart’s vibrant real estate market, Deltos Finance is here to empower you to make the right decisions.

Contact us today to get started. 

Enquire Now

Find Your Perfect Finance Solution

Let's discuss your finance needs. We’re here to help.

More posts from Deltos Finance

first home guarantee scheme

The First-Home Buyers 5% Home Loan Deposit Scheme Explained

As a first-time home buyer in Australia, one of the biggest hurdles you’ll face is coming up with a substantial deposit. Traditionally, lenders have required a deposit of at least 20% of the property’s value, but what if you could secure your dream home with just a 5% deposit? That is possible through the First […]

costs of buying a house

What Are the Upfront Costs of Buying a Home?

Are you searching for a one-bedroom apartment close to the city or planning to a big house with a garden in one of the best Tasmanian suburbs? Either way, it pays to know the upfront costs of buying a house apart from the home loan deposit. These costs may include government taxes and other associated […]

buying your first home

The Ultimate First-Home Buyer Checklist

Although owning your first property is incredibly exciting, it can also be complicated, time-consuming and a bit stressful. So, today, we’ll make your home-buying experience less confusing, smoother and more convenient. Here’s our ultimate first-home buyer checklist to help you know what to do and expect at every step. 1. Budget for Deposit & Other […]

local mortgage broker benefits

The Advantages of Engaging a Local Mortgage Broker

When you’re in the market for a new home, you’re bound to face several challenges—from overlooking loan comparisons to underestimating additional upfront costs and avoiding other common home loan mistakes. You might also be tempted to go directly to a bank, but there’s a compelling case for choosing a local mortgage broker instead. Today, we’ll […]

first home super saver scheme

Can First-Home Buyers Use Their Super for a Deposit?

You already know what you want for your first home. You even have nailed down the specifics—from the location or suburb to the number of rooms you want. The only problem left is the deposit. Like most Australians, you probably have a difficult time saving enough for the optimal home loan deposit amount.  In Tasmania, […]

regional first home buyer guarantee

A Quick Guide to Regional First Home Buyer Guarantee

It’s no secret that buying your first home comes with certain challenges, especially when you need to pay for a substantial deposit. However, if you’re looking to buy in regional Australia, the Regional First Home Buyer Guarantee (RFHBG) could be the helping hand you need. Today, we’ll provide a quick guide to help you understand […]

stamp duty concessions tasmania

Buying a House in Hobart? Here’s What You Need to Know About Stamp Duty Concessions in Tasmania

When you purchase a house or investment property in Hobart, Tasmania, you will likely pay a stamp duty—just like in all other states of Australia. Stamp duty can be a hefty upfront cost, so you may wonder whether concessions or exemptions are available. Today, we’ll help discuss how stamp duty works, how it is calculated […]

A young couple buying their first home.

Can You Use the First Home Owner Grant as a Deposit?

Dreaming of owning your first home in Australia? While you can use all your savings to pay for your home deposit, you must know that there are government grants that can help lower the initial cost of your first home purchase. Today, we’ll zero in on one of those grants: the First Home Owner Grant […]

how long does it take to refinance a home loan

How Long Does It Take to Refinance a Home Loan?

Switching to a new home loan, also known as refinancing, is a wise move, especially when you want to take advantage of lower interest rates or access the equity in your property. But how long does it take to refinance a home loan in Australia?  Refinancing may seem lengthy and overly complicated, but it can […]

first home owners grant

Five Common Questions About the First Home Owner Grant in Tasmania

Are you considering purchasing your first home in Tasmania soon? Before you apply for home loans, it pays to know that the Tasmanian government offers various grants and incentives to help you save money on your first big purchase. You can start by learning about the First Home Owner Grant in Tasmania. Today, we’ve compiled […]