Refinancing? When is a good time?
Refinancing?
is the right
option for you?
1. Why refinance?
As a homeowner with a mortgage, chances are you’ve heard of the term 'refinancing'. Refinancing involves reviewing your current mortgage, and potentially swapping your loan to another lender, who can better meet your current needs, wants and circumstances.
2. Reasons to Refinance
Lower Interest Rates - Refinancing can be a strategy to secure a lower interest rate, switch to a different type of loan and can also allow you to consolidate your debts or pay down your mortgage more quickly.
Accessing equity - Another common reason borrowers look to refinance is to access equity – the amount you'd get from selling your home after settling any associated loans and any other costs associated with the property. However, refinancing isn’t suitable for everyone. There are many different factors you’ll need to consider when thinking about refinancing a loan.
Switching loan types - Refinancing may allow you to change to a different loan type, for example switching from a variable loan to an interest only loan.
Consolidating depths - If you want to refinance to lower lending costs to help you manage your monthly repayments, speak to your mortgage broker who can negotiate with your current lender for a rate suitable to your current situation.
3. Factors to consider to lower interest rate.
If your purpose of refinancing is to aim for a lower interest rate, this could potentially save you a lot of money in the long-term. While saving money is often one of the biggest benefits of refinancing, it may not be as straightforward as that and careful consideration is required.
Determining the Viability of Refinancing
Potential Savings: If refinancing can save over $1,000 annually, it becomes a sensible option.
Assessment Process: A mortgage broker will gather information about your existing loan, repayments, current loan structure, financial situation, income, debts, and assets.
Property Value Analysis: The broker will consider the current value of your property to determine its worth.
Loan Options Review: The broker will assess different loan options and determine whether refinancing is worthwhile.
5. Speak to a mortage broker
Refinancing is not something to take lightly, as many things should be considered. The current value of the property is also taken into consideration, if you speak to a broker, they will have access to current data that will indicate what your property is likely to be worth. They can also inform you if obtaining a lower interest rate from your current lender is possible without refinancing.
Paying too much for a home loan?
See how we saved customers more than $6000 per year, just by reviewing their home loan.
