Have you taken out a home loan in the last few years? If so, you may be interested in reviewing your loan. In this article, you will discover why you should review your loan, what the costs are and some important points to consider.
Why review your home loan?
If you chose a variable rate home loan, there is no need to review your loan. This is because the interest rate on your loan automatically adjusts to current rates.
If you chose a fixed interest rate, this is probably a smart decision though.
There are several reasons why you might consider reviewing your loan:
- A change in interest rates that may make your loan agreement no longer the most advantageous option.
- Since you took out the loan, your financial situation may have changed, allowing you to negotiate better terms or lower payments, for example.
- In addition, there may be new loans on the market that offer a better deal than your current loan agreement.
Additional costs
When refinancing, you do have to consider additional costs, even if you stay with the same bank. If you do choose to switch to another bank, there are often additional costs. Below is an overview of these additional costs depending on your situation:
Refinancing by your own bank
When you refinance the loan with your own bank, it is best to take into account additional notary fees and filing fees for taking out your new home loan. There may also be additional fees for debt balance insurance. And in the event that you repay part of your home loan early, you will pay a reinvestment fee worth up to 3 months’ interest.
Refinancing by another bank
When refinancing through another bank, you have notary fees for canceling the loan with your old bank and notary, mortgage and registration fees for taking out a new loan. There may also be additional fees for debt balance insurance and other products such as new credit cards. Finally, the bank may ask to re-appraise the home. For this, it is best to factor in appraisal fees and additional filing fees.
Want even more info on additional costs? Then read the following blog article on the cost of refinancing a mortgage loan.
Reviewing your home loan: key steps
Refinancing is not settled overnight. It is necessary that you inform yourself well and make considerations based on your current situation. Here are some guidelines to get you started in reviewing your home loan:
- Compare your own interest rate to the current market rate
- Check the length of the loan agreement and see if it still fits your current financial situation.
- Review the additional costs of refinancing. Also take into account any early repayment penalties or closing costs.
- See what financing offers are all available and which ones best fit your situation.
- Also, talk to another bank and see what is most advantageous for you: switching or negotiating with your current bank.
Still don’t know where to start? Then appoint a mortgage consultant. This one will be happy to give you advice about your loan in plain human language.
Curious about housing changes this year? We’ve listed all the 2023 housing changes for you.