Are you contemplating refinancing but not sure whether it is the right move for you?
While there is no simple response to that question, there are numerous advantages associated with refinancing that you may wish to consider.
Refinancing may give you a chance to take advantage of the lower interest rates on offer. By refinancing, you could secure reduced repayments. This could occur when the loan has a lower fixed rate or lower variable rate or you receive a discounted loan which is when we negotiate a percentage off the market rate for the life of the loan. You could also opt to extend your loan repayments a little longer bringing the actual repayments down.
While it depends on the loan terms of the lender, even with the possible expenses of refinancing, with the reduced interest rate it is still possible for you to be paying less altogether on your mortgage. Importantly your mortgage broker should ensure that you have calculated the costs of refinancing to ensure the savings you make out ways the potential costs. You should also ask your mortgage broker if any lenders will refund any of these expenses.
If you had ended up in a situation where you are making significantly more income than you were when you first purchased your home you may wish to renegotiate the loan term or access a professional package to pay the loan sooner. Making additional payments off your loan is not always permitted; check your some loan contracts to see if this is your situation. Some loans contracts also change the repayments annually to ensure the loan runs the full 30 years. If this is your circumstance, more reason to start considering refinancing to a lender who will allow additional repayments. In some instances, it is worth considering looking at a reduced term to ensure the loan is paid off faster.
If you have a better credit rating now than when you purchased your home, it is highly possible that the interest rate on your loan is significantly higher than some of the current rates. It would be worth your while to speak to us to find out where your credit rating is today. Homeowners who have built up and improved their credit rating since purchasing their home can often take advantage of the most competitive rates out there. A better credit rating equals better interest rates, therefore, lower repayments.
The major advantage for many who refinance is accessing of possible equity which has accrued since purchasing your home. With the rise in the value of property prices in today’s market, this is something worth considering. The access to equity is a great way to complete those renovations that you have been dreaming about while watching reality shows. Another way you might use the equity is to start building your own property portfolio by using the equity as a deposit for the next investment property.
The interest rate on your mortgage is one of the lowest available. By consolidating higher interest loans like credit cards and car loans, you can save yourself thousands in interest. Ask for a split home loan with the same condition but with a lower rate and you could be paying off that debt before you know it.
The options are endless.
Rebecca A Mitchell – Awesome Lending Solutions
Rebecca is extremely experienced in the finance industry with various roles over the last 20 years. She has a passion for customer satisfaction and ensuring clients expectations are met. Rebecca is the main mortgage broker at Gordon NSW.
Disclaimer: This blog post has not taken into account your objectives, financial situation or needs. Due to this, before acting on any general advice/information in this communication, you should consider whether it is appropriate to your objectives, financial situation or needs.