Refinancing or repricing might help you save thousands, even hundreds of thousands, throughout the loan’s term! On average, our client’s save over $3,000 annually.
Benefit 1:Â Reducing your interest rate
Primarily, refinancing can lead to a lower interest rate, reducing both your monthly payments and the total interest paid over the loan’s duration.
For instance, refinancing from a 30-year fixed-rate mortgage at 4.5% to one at 3.5% could significantly cut down the interest you pay across the loan’s lifespan.
However, it’s important to remember that refinancing might incur costs, including discharge fees for your current loan and application fees for the new one. These fees can vary by lender, so thorough research is essential before making a refinancing decision.
Benefit 2: Consolidating High Interest Debt To Improve Cash Flow
Like many Australians, you might be juggling a home loan, personal loan, and possibly a credit card balance. Managing multiple repayments can be challenging. Refinancing your home loan offers a way to simplify your debts and possibly lower your overall interest expenses by consolidating them.
Yet, it’s important to consider the potential drawbacks of debt consolidation. Extending the repayment period of short-term debts like personal loans over the lifespan of a home loan could increase the total interest paid.
Effective debt consolidation requires making extra payments to swiftly reduce the consolidated loan amount. Since everyone’s financial situation is unique, consulting with us can help you identify the best strategy for your needs.
Benefit 3: Cash Back Incentives
Switching from a variable rate to a fixed-rate mortgage through refinancing can also lead to savings by securing a lower interest rate and providing stability against future rate hikes. However, this switch might not always be beneficial, depending on personal financial circumstances.
Benefit 4: Equity Release for Renovations or Business Use
Refinancing your mortgage can also unlock the equity in your home, providing you with capital for renovations or to invest in a business (if a commercial loan). This approach can enhance the value of your property or contribute to business growth. However, leveraging your home’s equity should be considered carefully, as it depends on individual financial situations and long-term goals. Accessing your home’s equity through refinancing for such investments can be strategic, but it’s essential to assess the risks and ensure it aligns with your overall financial plan.
Refinancing can offer significant savings, but it’s vital to balance the potential advantages with the costs and risks. Which is why we are offering an Advanced Free Credit Assessment where we can let you know what options you have available.
You can use your existing home equity for refinancing. If there’s a significant change in your property’s value, you might need to contribute a certain percentage deposit of the property’s value.
Deciding on refinancing depends on personal factors like your current interest rate, home equity, and financial goals. Booking a meeting with an Approved broker is your first step
Begin by comparing rates and terms from various lenders using your Approved broker.
It’s possible to refinance with bad credit, though options may be limited and interest rates higher.
Refinancing is possible even with past due payments, but you’ll need to demonstrate the ability to maintain current payments.
As home loan brokers dedicated to finding the best options for our clients, we want to remind you that eligibility and approval for mortgages are subject to standard credit assessments. Not every applicant will qualify for all loan amounts, term lengths, or rates.
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