A messy divorce can often make things worse for women as they struggle to deal with the emotional and financial trauma of years spent on the back end when it comes to money.
For NSW resident Dee Wheller, she learned this the hard way when a divorce left her with a mortgage she didn’t know what to do with.
“I felt like I had to relearn everything,” she said.
“Anyone who has left their finances to their husband knows how difficult it is to rebuild their life and regain their financial confidence. It’s incredibly daunting just to think about it or know where to start.
She knew she was getting a rough deal with her existing lender, which she felt was unnecessary, but was hesitant to refinance.
“I didn’t know where to start and I had no one to turn to for advice. I just knew I wanted to control my finances,” she said.
So she approached a number of different lenders until she found one who actually listened.
“What I really enjoyed was having personal contact with women on the uno team and that changed everything for me,” Wheller said.
“Experienced brokers helped break down the refinance process into small chunks and walked me through the process.”
She ended up saving $16,000 just by refinancing — and far from difficult, Wheller described it as an “easy” and “uplifting” process.
“It was all 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 has been incredibly liberating.”
The risks of refinancing
However, there are certain risks associated with refinancing that should be considered before making a change.
For example, there may be several fees associated with the conversion, such as exit fees, appraisal fees, filing fees, registration fees, or even settlement/legal fees.
You may also have to pay the lender’s mortgage insurance (LMI), which could end up seriously defeating the purpose of refinancing if you were hoping to save money.
Refinancing will also impact your credit score, since every credit application will go towards your credit history.
Plus, refinancing can mean getting a new mortgage with added benefits, which you may not want. According to refinance.com.au, there are six questions you may want to ask yourself before refinancing.
There are certain situations in which it will be disadvantageous to refinance, such as when the value of your property has decreased or you will not own the property for very long, your credit score is not very good or your source of income is not stable and consistent (for example, you might be a freelancer).
Tips for refinancing your home loan
While there are risks to refinancing, there are also benefits, such as a lower interest rate, access to equity, and more flexibility with your repayments.
Here are Wheller’s top tips for refinancing your home loan to save thousands of dollars:
1. Don’t be afraid to ask for help
The financial blow of divorce can be very difficult, so just ask if you need help.
“It was a huge learning curve for me and I blamed myself for not doing it sooner. Find an expert who can help you navigate the financial maze and take the first steps towards financial confidence” , she said.
2. Find the right deal
There are many reasons to refinance, such as consolidating your debts or saving money. Keep an eye on interest rates every two or three years, Wheller said. “Lenders typically raise their rates during this time. It’s definitely worth exploring the market for a better rate and potentially saving 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 score out of 100 on the “health” of your home loan (the higher the number, the better the deal), and says it receives regular alerts on when she can save again.
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