A messy divorce can often leave women worse off as they struggle to deal with the emotional as well as the financial trauma of years of taking the back seat when it came to money matters.
For NSW resident Dee Wheller, she learnt this the hard way when a divorce left her with a mortgage that she didn’t know what to do with.
“I felt like I had to learn everything all over again,” she said.
“Anyone who has left their finances to their husband knows how difficult it is to rebuild your life and regain your financial confidence. It’s incredibly intimidating just thinking about it or knowing where to even start.”
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She knew she was getting a raw deal with her existing lender, who she said was unhelpful, but felt hesitant about refinancing.
“I didn’t know where to begin and had no one to turn to for advice. I just knew I wanted to get my finances in check,” she said.
So she approached a number of different lenders until she found one that actually listened.
“What I really appreciated was having actual person-to-person contact with women from the uno team and that changed everything for me,” Wheller said.
“The experienced brokers helped break down the refinancing process into bite-sized chunks and guided me through the entire procedure.”
She ended up saving $16,000 just by refinancing alone – and far from difficult, Wheller described it as an “easy” and “uplifting” process.
‘The whole thing was done and dusted before I knew it.
“Refinancing my home loan was a step in the right direction, I’m able to pocket the savings for a rainy day and focus on myself.
“Taking control of my money and making conscious decisions about my financial situation was incredibly liberating.”
The risks of refinancing
However, there are certain risks to refinancing that need to be considered before making a switch.
For example, there are several fees that may be involved with switching, such as exit fees, valuation fees, application fees, registration fees or even settlement/legal fees.
You may also have to pay Lender’s Mortgage Insurance (LMI), which could end up seriously defeating the purpose of refinancing to begin with if you were hoping to save money.
Refinancing will also impact your credit score, as well, since every application for credit will go towards your credit history.
Additionally, refinancing might mean getting a new mortgage that comes with additional benefits – that you might not want. According to refinancing.com.au, there are six questions you might want to ask yourself before you refinance.
There are some situations in which it will be disadvantageous to refinance, such as when your property value has decreased or you won’t be owning the property for very long, your credit score isn’t very good or your source of income is not steady and consistent (e.g. you might be a freelancer).
Tips to refinance your home loan
Though there are risks to refinancing, there are benefits, too, such as a lower interest rate, access to equity, and greater flexibility with your repayments.
Here are Wheller’s top tips for refinancing your home loan to save yourself thousands:
1. Don’t be afraid to ask for help
The financial hit of divorce can be very rough, so just ask if you need help.
“It was a huge learning curve for me and I was kicking myself for not doing it sooner. Find an expert who can help you navigate the financial maze and take those first few steps into financial confidence,” she said.
2. Find the right deal
There are lots of reasons to refinance, like consolidating your debt or saving money. Keep an eye on interest rates every two to three years, Wheller said. “lenders usually increase their rates during this time. It’s definitely worth exploring the market for a better rate and potentially save thousands of dollars.”
3. Check your loan score
If you’re not used to managing your own finances, take a look at online tools and platforms that can make the process easier. Wheller recommends uno’s loanScore online tool which gives you a rating out of 100 on how ‘healthy’ your home loan is (the higher the number the better the deal), and says she gets regular alerts on when she can save again.
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