Expert Edge: Real Estate & Lending Tips with Samuel Nashaar from SJN Finance What’s the biggest misconception you see around refinancing, and how can homeowners approach it more strategically? Generally, we see many people wanting to refinance to a lower interest rate. However, what most people don’t consider is that their broker or bank is actually getting them a new loan over 30 years. Even if the interest rate is lower, in many cases you’re actually costing yourself $100,000 - $400,000 more, over the life of the loan. Refinancing should be done with a specific purpose and the savings needed to be calculated over the life of the loan, not just your monthly repayments decreasing. Be careful of a shiny new interest rate. With the recent interest rate cut, what opportunities or risks should buyers be paying attention to right now? To put it simply, if you’re buying because rates were cut, you might be buying for the wrong reason. Lower interest rates bring confidence back to the market (meaning people will pay more for the same thing). Wouldn’t this indicate a great time to sell? So why do we jump on the bandwagon and start bidding at auction with money we don’t have? Buying property should usually be assessed with a medium to long term time horizon. If that’s the case, a rate cut or increase doesn’t mean much in your long term goal. Remember WHY you’re buying a property, try not to get caught up in the hype of media and emotions at auction. What’s your top tip for buyers in the current property market? Don’t rush. Create a clear picture of your reasons for buying. Get a pre-approval and understand your exact budget. If you get emotional at auctions or you’re having difficulty negotiating or finding a property, engage a professional to assist you. They will likely save you a LOT of time and a LOT of money in the long run.
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