You might think switching banks is too difficult, but it does not have to be that way. In this article, find out how to change your bank and take advantage of the best possible home loan by following these three easy steps.
1. Write down your requirements
Think of what services and products you want from a new lender. Below are some of the things you could consider:
- Great customer service team
- More flexibility in terms of payment schemes and loan product features
- Better home loan interest rates
- Access to a line of credit
- A bank that allows you to easily manage your payments, personal budget, and savings
Before you approach various banks—either personally or through the help of a mortgage broker—talk to your current lender first. If they offer you a better deal, put it into writing, so you can use it when negotiating with other banks.
2. Calculate and compare the costs of switching lenders
In most cases, changing to a new lender will involve different fees, particularly a loan establishment fee, regular administrative charges, and lender’s Mortgage Insurance, which is a pro-lender insurance that is suitable for deposits that are less than 20% of a property’s value. If you have a fixed-rate loan, you may have to pay for early repayment or exit.
While you will most likely face many fees by switching lenders, the good news is you can recover your initial cost in just around two to three years because of cheaper interest rates and by using a different home loan product.
3. Start your application for a loan refinance
To make sure the entire process goes smoothly, prepare all the supporting documents that your lender may require you to present. Some of these common documents are tax returns, proof of earnings, and documentation of your existing loans and expenses.
Refinancing does not have to be a daunting task. Get help. For instance, Freedom Lend provides qualified home loan consultants who can help you with the entire process, including settling your old home loan after your lender approves your refinancing application.
Switching to a new lender can be a great idea, whether you’re looking for cheaper interest rates, more flexible payment options, or to streamline your finances. Everyone has different needs, so talk to a financial consultant to get expert advice on whether it is a good move for you to transfer to another lender.
