What is refinancing your home loan? Well, it involves changing the mortgage provider to another provider in order to receive a better deal. This is often because a lower interest rate, a lower payout, or a longer loan period can be achieved.
A lot of people are worried about refinancing their home loans due to the fact that they’re not sure if their current lender will allow them to do so. Fear not, as this article will walk you through the process of refinancing your home loan, should you want to.
Before deciding on refinancing your home loan, you’ll want to be informed of the process. Otherwise, you may find yourself paying a higher interest rate than what is necessary. If you do find yourself in a situation fit for refinancing solutions, then here are the benefits:
The number one benefit of refinancing your home loan is that you’ll save on interest charges. This will, in turn, save you a lot of money in the long run.
If you’re in a situation where you’re currently paying around 6% interest per annum and you’re able to find a mortgage provider that’s willing to offer you a low-interest rate of around 4%, you’re going to save a substantial amount of money.
Another benefit of refinancing your home loan is that you have more flexibility when it comes to repayment options. For example, if you currently have a 5-year fixed-term loan, you could negotiate with your lender to change it to a 10-year fixed-term loan. This will save you a great deal of money, as you’ll pay less in interest.
If you have an adjustable loan period, you may be able to switch to a fixed-term loan on your own. With a fixed-term loan, you’ll know exactly how much you’ll pay per month in order to pay off the loan. This is sometimes more beneficial than an adjustable loan period, as you’ll be able to plan your finances accordingly.
If you find yourself in a situation where you have an adjustable loan period, you might want to refinance your home loan in order to take advantage of your home equity. For example, let’s say you have a $200,000 home loan. If you decide to refinance your home loan, you might be able to negotiate with your lender to have a $250,000 home loan. This will give you another $50,000 to work with.
Another reason to refinance your home loan is that you can organise your debt into one loan. If you currently have multiple loans to pay off, you might want to consider refinancing your home loan so you can have one loan to pay off. This will help you to manage your debt and make it easier for you to meet your dues.
If you find yourself in a situation where you’re not sure if you want to refinance, there are a lot of benefits to doing so. Some of the benefits include saving on interest charges, lowering your repayment plan, and also taking advantage of your home equity.
But, don’t forget to consider the drawbacks to refinancing your home loan. There are quite a few, so if you’re not sure, you might want to consult with a professional who can guide you through your options.
When you need a mortgage broker in Australia, it pays to work with the best. As a leader in providing professional mortgage broking services to home buyers, Shore Financial is here to help you choose the right loan to fit your needs. Our extensive knowledge of the mortgage market allows us to choose the best loan provider to suit you.