Refinancing provides an opportunity to fix some of the things that are wrong with your existing loan so you are better placed to reach your goals – it’s having your mortgage work for you rather than against you.
In the simplest of terms, refinancing is when you replace all or part of one loan with another. In the world of credit cards, this is commonly known as a balance transfer; however, in relation to a mortgage it is called a refinance.
Your home loan is when you either take out a new home loan with a new lender, or negotiate a better loan with your existing financial institution.
The point of doing so is almost always to secure a lower rate of interest that will save you money on your monthly repayments. By doing so, the finance charges may be higher over the life of your loan.
It’s worthwhile investigating the possibilities of refinancing if your situation has changed such as you have a new/another baby, you want to buy a bigger property or you feel you are locked into interest rates above market value.
When refinancing DOES make sense
Your lender’s rate isn’t staying competitive with others in the market
A major change occurs in your financial situation
You are looking for more money to pay for home renovations, a child’s education costs, or invest in another property
Switching to a fixed rate at an opportune time
You’ve started to see large credit card debts and want to consolidate
When refinancing DOESN’T make sense
You might not own the property for much longer
Prepayment penalties are high on exiting home loan
Since your previous loan your credit history has taken a hit due to outstanding debts, making it less likely you’ll get a good rate
You’ve got an uncertain income over the period of the loan
Your loan balance is low and you’re not thinking of redrawing on available equity
Home loan refinancing may be used for different reasons including:
Renovate your home or other home improvements
Pay off your debts such as credit cards by rolling them into your home loan.
Obtaining a cheaper rate, even if it means giving up a few loan features.
To raise cash for a purchase such as a car.
You want to switch from a variable rate to a fixed rate, perhaps because you can want to reduce the risk of higher repayments.
No matter which direction the options are going, we believe there are steps that serve to ensure a successful refinancing experience.
To learn more about refinance your home, please contact us at 1-855-901-8633 (Toll Free)
Our professional team of loan mortgage consultants are ready to assist you. They can help you navigate the loans you can choose from, calculate the benefit, and help you understand the features. They can also assist with making the application process straightforward and will keep you updated so you know what is happening.