INSIGHTS WITH EVALESCO
Is your fixed home loan rate about to expire? Are you worried that you don’t know what is next when the time comes?
Kristi Teasel our Evalesco Mortgage Broker is here to help. Here is the process of what is involved on to give you piece of mind that your home loan is under control.
These are typically the steps that are involved to negotiate your new home loan rate:
Assessing the borrower’s financial situation: Our mortgage broker, Kristi, will review your financial circumstances, including your income, expenses, credit history, and overall financial goals. This evaluation helps us to understand your needs and determine the most suitable loan options.
Researching the market: Kristi will survey the current mortgage market to identify lenders offering competitive variable interest rates and favourable loan terms. She will compare various loan products, including interest rates, fees, features, and repayment options, to find the best fit for you.
Presenting options: Based on this research, Kristi will present a range of loan options to you. She will explain the features and benefits of each loan, including the potential interest rate savings, flexibility, and any associated costs. Kristi will help you understand the pros and cons of each option to make an informed decision.
Negotiating with lenders: Once you select a preferred loan product, Kristi will engage with the lender on your behalf. She will negotiate the terms of the new loan, including the variable interest rate. Kristi will leverage her industry knowledge and relationships with lenders to secure the most favourable rate possible for you.
Submitting the loan application: After you and Kristi agree on the terms and interest rate, she will assist in completing the loan application accurately and thoroughly. She will gather all necessary documentation and submit the application to the lender.
Managing the loan approval process: Kristi will liaise with the lender throughout the loan approval process, ensuring all requirements are met and providing any additional information or documentation as needed. She will communicate with you to keep you informed about the progress of the application.
Settlement and transition: Once the loan application is approved, Kristi will coordinate the settlement process. Kristi will work with the lender, solicitors, and other relevant parties to ensure a smooth transfer of funds and account management from the old loan to the new variable rate loan.
Throughout the process, as your Mortgage Broker acts as an intermediary between you the borrower and the lender, using her expertise and industry relationships to negotiate favourable terms. She will provide guidance, support, and personalised advice to help you to secure a competitive variable rate loan that suits your financial needs.
One another term coined the ‘Mortgage Prisoner’ was discussed in our latest webinar here. A mortgage prisoner refers to a situation where homeowners are trapped in their existing mortgages, unable to refinance or switch to more favourable loan terms.
Historically, many Australian borrowers took out loans with smaller lenders, which offered more competitive interest rates. The issue arose when borrowers with loans from these smaller lenders found it difficult to refinance or switch to loans offered by larger banks. This was mainly due to tighter lending criteria and reduced access to credit. As a result, some borrowers became “mortgage prisoners,” as they were effectively trapped in loans with higher interest rates and less favourable terms.
Mortgage prisoners often face financial hardship, as they are unable to take advantage of lower interest rates or more flexible loan options available in the market. This situation can occur when the value of the property has declined, income circumstances have changed, or lending criteria have become more stringent.
Recognizing the issue, the Australian government and regulators have made efforts to address the problem of mortgage prisoners. For instance, the Australian Prudential Regulation Authority (APRA) has relaxed certain lending requirements, allowing banks to refinance loans for mortgage prisoners, provided it is in the borrower’s best interest and meets responsible lending standards. However, the situation can still be challenging for some borrowers, and individual circumstances may vary.
To find out more about your home loan interest rate options, book an appointment with Kristi or your adviser.
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The amount of super you’ll need when you retire depends on your big costs in retirement and the lifestyle you want. The Associate of Superannuation Funds of Australia (ASFA) estimates for a single $44,224 a year and for couples $62,562 a year is how much you may need. This is only an indicator and our advisers assess everyone’s individual circumstances.
The fees we charge for financial advice is only a fraction of the value we derive for our clients, meaning our clients are always better off after seeing us. Rarely do we encounter a new client invested appropriately for their needs, with adequate risk protection, structuring and estate planning provisions in place. Even small tweaks to a financial plan over a long period of time can result in drastically better outcomes for our clients which eclipses the fees of the financial advice. Additionally, you can opt-out of an ongoing fee arrangement at any time.
In our discovery meeting with you our advisers discuss the initial advice fee and the ongoing fees associated with our services.
After our initial phone call to discuss why you are seeking a financial adviser, we arrange a discovery meeting that outlines what is important to you, your current position, our areas of advice, our approach. We then present a Statement of Advice (SoA) to discuss your goals and our recommendations and go through the steps of how to proceed to the implementation stage. After signing the SoA, we discuss your questions, get you to sign the authority to proceed and complete any application forms before implementing the recommendations detailed in the SoA.
One thing to consider is the interest rate on your home loan in comparison to the rate of return on your super fund. Before making a decision, it’s also important to weigh up your stage in life, particularly your age and your appetite for risk. Whatever strategy you choose you’ll need to regularly review your options if you’re making regular voluntary super contributions or extra mortgage repayments. As bank interest rates move and markets fluctuate, the strategy you choose today may be different from the one that is right for you in the future
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