When most people investigate refinancing, the first thing that they look for is a lower interest rate. But finding a cheaper home loan than your current one doesn’t necessarily mean you will be better off. We list our top 10 commontraps to look out for when making the refinancing decision.

1.  Automatically refinancing with your current lender without shopping around. Boy, do they love it when you do that!

2.     Assuming that the lender has your best interest at heart, even if you have had a relationship with them for many years.

3.     Procrastinating because you think it’s too hard, which can potentially cost you thousands of dollars.

4.     Not having one of Great Aussie Dream’s highly skilled Brokers regularly check your current Home Loan and revise your financial position. It’s free you know?

5.     Assuming that a lower rate will save you money without considering overall costs. Make sure you have accounted for application fees, monthly or yearly account keeping fees, deferred establishment fees, break costs and exit fees on existing loans, particularly fixed rate loans.

6.     Falling prey to the lure of honeymoon rates, which ultimately revert back to their original or higher rates at the end of the introductory period.

7.     Entering a refinance deal that gives you relatively little benefit but pushes your loan value above 80% of your home's value so that you pay lender’s mortgage insurance.

8.     Borrowing more than you need and ending up with repayments higher then you had budgeted for. This often leads to a downward spiral of consecutively larger refinances.

9.     Switch from variable to fixed or fixed to variable because that type of rate is lower at the moment – then wonder why you did it when rates change again.

10.  Consolidating smaller debts into your home loan such as Credit Cards, but extend the term of your home loan so that you are effectively paying interest on small debts over 30 years, instead of the previous one or two.

At Great Aussie Dream our highly skilled Brokers can quickly assess your current loan and compare it to hundreds of loans offered by dozens of different Banks and Lenders. We can even work with your current Bank to see if we can negotiate a better deal.

Best of all we work for you, doing all of the leg work making it as easy as possible for you. We also provide you with a comprehensive report which details all of the costs involved and shows you how you will be better off. Who knows, we may even recommend doing nothing, but at least you’ll know that your finances are well taken care of.

That’s what our clients have come to expect, why they keep coming back and why Great Aussie Dream has been named Mortgage Broking Business of the Year for the last 2 years in a row.

At Great Aussie Dream, we make the Dream a Reality!