30 Jan 2017
Refinancing? Avoid The Not-So-Nice Surprises

Refinancing? Avoid The Not-So-Nice Surprises

Refinancing? Avoid The Not-So-Nice Surprises
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Guid,Tips,Selling,Auction real estate agents

Switching to a lower interest rate could lead to big savings, but unless you do your homework, you could find yourself grappling with nasty surprises, including higher fees, tougher terms and new deposit requirements. 

It’s important to shop around for the best rates and terms and “cheapest” is not always best.

Check out this checklist of fees:

When you’re refinancing, always pay attention to the timing. Settlement occurs when the contract is signed for the new loan and the funds are drawn. This involves paying off the existing loan using funds from the new loan.

  • Discharge fees from an existing lender – This is an administrative fee ranging from $100 to $200 for processing the discharge of the mortgage or loan.

  • Early repayment fee – While most have been phased out, some of the smaller lenders can impose a fee ranging from $100 to $1000.

  • Fixed rate break fee – These fees can total up to several thousand dollars.

  • Mortgage registration – This state government fee is levied when the incumbent lender deregisters a mortgage and the new lender registers the new one. The cost will depend on your state, but ranges from $220 to $350. 

  • Application fees – Can cost nothing but could be as exorbitant as $1000.

  • Valuation fees – They’re not normally charged for standard properties but can cost from $100 to $300.

  • Settlement fee – This administrative fee is charged by the new lender and costs between $100 to $300.

  • Lenders mortgage insurance – LMI applies if more than 80% of a property’s value is borrowed. If can range from 2% to 4% of the loan amount, which often makes it too expensive to refinance.


When Naked Real Estate have any finance related questions, we speak to Ash Blue Finances for their expert advice.

Written by Naked Writers

Refinancing? Avoid The Not-So-Nice Surprises
Naked Writers

Naked Real Estate Writers collaborating to bring the latest news and trends in real estate for buying, selling and working in the exciting world of real estate. Is it time for you to get Naked?

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