Refinance and SAVE!
When it comes to mortgages, either for your own home or an investment property, what most Australians don’t do is consider refinancing their mortgages.
Refinancing a mortgage loan basically means revising and financing the loan again with a lower rate of interest.
There are many reasons why you should consider refinancing your home loans.
- Obtain a lower interest rate
By refinancing your current loan, you may be able to opt for a loan with an interest rate that is not only lower but much more suitable for your financial situation.
A hot tip is to keep an eye out for the interest rates drop and take advantage of the opportunity to pay significantly less interest payments.
- Shorten the term of your loan
Refinancing also allows you the flexibility of being able to chose to a much shorter term rather than paying “feeling stuck” with a 30 year loan term. This means less worry, less stress and a quicker, happier YOU.
- Switch from a variable rate loan to a fixed rate loan, or vice versa
Depending on what your current financial situation is, it can be beneficial for you to consider switching your loan to a fixed rate mortgage or a variable rate mortgage.
Another element to also consider while refinancing your home loan is how long you plan on residing in your current home.
- Using home equity to finance other projects/investments. a financial emergency, a large purchase/expenditure.
While refinancing allows for all previously mentioned reason, mortgage refinancing can feel like a never-ending debt.
Homeowners often tap into the equity of their homes to finance major expenses such as a sudden financial emergency, a large purchase or an expenditure etc. Whilst this may allow for immediate solutions to problems, it may also lead to an increase in number of years on your mortgage and rarely a smart financial decision.
The bottom line is that refinancing can be a great financial move, given it is beneficial to your mortgage by either reducing the repayments and interest payments, shortening the term of your loan or funding equity. It can be a great tool when used carefully with control.
Now, we’re not saying refinancing is the best option for everyone, all the time, but we do recommend contacting your mortgage broker to see if there is a better home loan rate available at the moment and how you can capitalize on it.
If you have any questions regards your mortgage or loan options, please don’t hesitate to contact us on 0411 689 020