Refinancing

What is refinancing?
Refinancing is the process of altering one or more loans on a business or property for another. This is most frequently done to increase the amount of a loan or take advantage of more beneficial interest rates or conditions. Given the extremely competitive interest rates currently available at most banks, this is an option a large number of individuals and businesses are taking up. The broad range of banks offering competitive interest rates makes it very worthwhile financially to consider whether you remain within your existing bank or whether to refinance to a new bank.

Existing Bank
It is always worthwhile negotiating with your current bank. Your current bank is unlikely to approach you to refinance to a lower rate, however if they know you are thinking of switching banks they may offer you a competitive rate so you continue your banking relationship with them.
 
Break Costs
What are Break Costs? Break costs are the fees your bank may charge if you pay off a loan earlier than the fixed interest rate term. If you current loan or mortgage is on a fixed interest rate (as opposed to a floating (variable) interest rate), it is likely you will incur break costs. Your bank will be able to give you an estimate of those break costs and you should do this prior to signing up with another bank for a refinance. You need to take into consideration the break costs when calculating if a refinance is in your best interests.
 
New Bank
If you decide that moving to a new bank is the best option for you, always ask whether the bank is willing to contribute towards your legal costs for the refinance and/or give a cash contribution. Most banks will want your business and one of the ways they help 'sweeten' the transfer is to offer a contribution to the fees associated with making the change. If you are refinancing from your existing bank to a new bank it is likely that you will need the assistance of one of our team at DK Legal or 247 Property to help you complete the process.
 
What does a lawyer do?
If you are switching banks our team at DK Legal or 247 Property will arrange for a discharge of the current mortgage security over your property. Your new bank will prepare and send to us the new loan documentation and mortgage instructions. The bank requires that you meet with a lawyer to explain the documentation to you and to complete the security change over your property from one bank to another.
 
Our 247 Property division of DK Legal offer a comprehensive and personalised service that deals with your refinancing requirements efficiently yet promptly without cutting corners. If you are considering refinancing and taking advantage of the extremely competitive interest rates currently being offered please feel free to contact us to discuss your particular requirements.