{"id":4630,"date":"2015-06-02T01:00:17","date_gmt":"2015-06-01T15:00:17","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=4630"},"modified":"2015-06-02T01:00:17","modified_gmt":"2015-06-01T15:00:17","slug":"refinancing-pitfalls","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/refinancing-pitfalls\/","title":{"rendered":"Refinancing Pitfalls – Andrew Mirams"},"content":{"rendered":"

 
\nIn today’s show\u00a0Andrew Mirams<\/b><\/a>,\u00a0from Intuitive Finance, answers some questions about re-financing pitfalls.
\n <\/p>\n

Transcript:<\/h4>\n

Kevin:<\/b>\u00a0 It might be fair to say that many borrowers will probably prefer to stay with their deal because they don\u2019t quite know what\u2019s involved in refinancing. There are some pitfalls that you need to be aware of, but if we can bring them to your attention, you might be able to go into a refinancing deal with a lot more confidence.
\nThat\u2019s what we intend to do over the next few minutes as I talk to Andrew Mirams from Intuitive Finance. Andrew, thank you for your time. I wonder if you can just help us with just outlining a few of those pitfalls when it comes to refinancing.
\nAndrew:<\/b>\u00a0 Good day, Kevin. Look, there are a few pitfalls, and it always comes back to the purpose, I guess, of why clients are actually looking to refinance \u2013 whether they\u2019re looking to get a better deal or more money or do a renovation or buy that investment property, etc., what that actually is.
\nI think one of the very first pitfalls that we see all the time is clients just going back into their current lender, asking them what they think they want, the lender says yes, and they get it and they think, \u201cOh good. I\u2019ve managed that myself,\u201d without actually doing the shopping around and the legwork to just check they\u2019ve got the best deal, they\u2019re getting the maximum amount of equity out if that\u2019s what they want to do. If they\u2019re being told why one lender that they can access $400,000 to buy an investment property, there might be another one that can give them $500,000 that gives them a better opportunity to buy a better property.
\nThe first thing is just accepting what your current lender offers you is the best deal. Do some legwork and absolutely, you should consult a mortgage broker in my opinion, and allow us to do the legwork for you. That\u2019s the first point. Don\u2019t accept what they just give you as a given.
\nKevin:\u00a0 <\/b>Okay. Check it out for yourself. And the next one?
\nAndrew:<\/b>\u00a0 I think the other thing in the current market, especially with low interest rates, people tend to shop on rate and they don\u2019t look at all the other options. A lot of the really cheap rates often have some fees \u2013 higher application fees, higher ongoing fees, and there might be other legal fees that they have to pay. Sometimes when you analyze it over a longer term, it\u2019s not actually cheaper when you take the whole package into consideration.
\nDon\u2019t just shop on rate; look at the whole package.
\nKevin:<\/b>\u00a0 Okay. The next one?
\nAndrew:<\/b>\u00a0 The next one is really interesting because I had a client only a week or so ago saying, \u201cLook, I\u2019m just going to wait to the next interest rate decrease, and then I\u2019m actually going to look.\u201d I said to him, \u201cWhy are you procrastinating? What are you expecting that you\u2019ll get by waiting that you won\u2019t get today?\u201d
\nHe said to me, \u201cWell, they\u2019ll be cheaper.\u201d I said, \u201cYes, but they\u2019re cheap today, and assuming that all the rates go down by 0.25, they\u2019ll be cheap everywhere in a couple of weeks\u2019 times or whenever if they do go down. How do you know they are going to go down?\u201d
\nDon\u2019t wait. Take action now is the most important thing. Whatever it is, if there\u2019s a saving, take it now. If rates go up or down, all the lenders are in a competitive market, so it\u2019ll go up or down accordingly.
\nDon\u2019t procrastinate. Don\u2019t wait for rates to drop or to see what the next best deal would be out there.
\nKevin:<\/b>\u00a0 That\u2019s a really great piece of advice. The thing that I found, too, is those who wait for things to become absolutely perfect generally end up doing nothing because it never, ever meets their expectation.
\nAndrew:<\/b>\u00a0 Absolutely. It\u2019s the old thing of waiting for the property market to drop, too, because they\u2019re going to buy cheap, and then they realized they missed the boat. It\u2019s the same thing with trying to shop, and the perfect storm very rarely arrives.
\nKevin:<\/b>\u00a0 Andrew, just before I let you go, what about those honeymoon rates? Something we should be aware of?
\nAndrew:<\/b>\u00a0 Absolutely, Kevin. Whilst they look good in the banks\u2019 and everyone\u2019s marketing and advertising material, they very rarely end up on your end deal coming out as a better deal. Generally, they come to a higher rate when they expire, and most people think, \u201cOh, I can refinance or do something about that,\u201d and then you can\u2019t \u2013 you\u2019re generally locked in for certain period or those fees.
\nThe banks are smart. They know that they want to claw back that cheap rate to get the client in the door. The honeymoon rates very rarely come out ahead of just a long-term discount we can apply.
\nKevin:<\/b>\u00a0 That in itself is another great reason to use a broker, because brokers know what these honeymoon rates are like. They can take the long term in terms of your lending, as well, Andrew.
\nAndrew:<\/b>\u00a0 Absolutely, Kevin. Yes.
\nKevin:<\/b>\u00a0 Very good. Great advice there from Andrew Mirams at Intuitive Finance on some of the refinancing pitfalls for you. Andrew, once again, thanks for your time, mate.
\nAndrew:<\/b>\u00a0 My pleasure, Kevin. Thanks.<\/p>\n","protected":false},"excerpt":{"rendered":"

  In today’s show\u00a0Andrew Mirams,\u00a0from Intuitive Finance, answers some questions about re-financing pitfalls.   Transcript: Kevin:\u00a0 It might be fair to say that many borrowers will probably prefer to stay with their deal because they don\u2019t quite know what\u2019s involved in refinancing. There are some…<\/p>\n","protected":false},"author":176692471,"featured_media":4634,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,13,25],"tags":[101],"class_list":["post-4630","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-latest-story","category-sponsored-channels","tag-podcast"],"yoast_head":"\nRefinancing Pitfalls - Andrew Mirams - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/refinancing-pitfalls\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Refinancing Pitfalls - Andrew Mirams - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"  In today’s show\u00a0Andrew Mirams,\u00a0from Intuitive Finance, answers some questions about re-financing pitfalls.   Transcript: Kevin:\u00a0 It might be fair to say that many borrowers will probably prefer to stay with their deal because they don\u2019t quite know what\u2019s involved in refinancing. 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