Why Do I Need To Refinance?

Refinancing your home can be a great way to take control of your finances. By securing a lower interest rate, changing your mortgage terms, or paying your mortgage back faster – there’s plenty of ways refinancing your home can really pay off. Let us help you get one step ahead.

LOWER INTEREST RATES

One of the best ways to save money on your mortgage is to secure a low interest rate. With a lower rate you’ll be able to pay back your home loan quicker, reducing the amount you’ll be paying on fees. There could be a few reasons why your interest rate is not as low as it could be; you may have had a high loan to value ratio when you purchased, or you may have a fixed mortgage. Refinancing your home gives you the opportunity to hunt around for a better deal that can save you thousands of dollars in the long run, including reducing your minimum monthly repayments.

MANAGE YOUR MORTGAGE TERMS

Refinancing your home can be a great idea if you’re after better mortgage terms, or if your lifestyle has changed since you purchased your home. If you initially signed onto a fixed interest rate you may be paying a little extra than you need to – especially if interest rates have dropped. By changing to a floating mortgage, you can take advantage of lower interest rates, or even re-fix at a lower rate. If you’ve decided to rent your house out, or you want to buy an investment property, you could consider refinancing and pay interest only. This can help you out at tax time and lets you pay back money on other higher interest liabilities.

REDUCE YOUR MORTGAGE LENGTH

Your mortgage will have a specified loan term – usually about 30 years. The repayments you’re making each month are calculated by the term of your loan, plus the interest you’ll be paying. If you’ve been paying more into your mortgage and will clear it earlier, that’s great! To help you out, you may want to consider refinancing to reduce your mortgage term. If you pay out your loan ahead of schedule you may get hit with some penalties, so refinancing to reduce the loan length could save you a lot of money.

ACCESS YOUR MONEY 

If you’d like to access the equity in your home, you may want to consider refinancing. While you can use this equity to make improvements to your home and potentially increase its value, be careful adding additional years onto your mortgage. If you need any advice on using equity in your home, chat to a lending specialist who can provide options on refinancing.

CONSOLIDATING

If you have existing liabilities that you want to pay off at a lower interest rate, you could consider refinancing your mortgage to include this additional debt. By consolidating your debt you’ll be able to take advantage of lower interest rates and make just one payment on your debt each month. If you’re focused on getting out of debt, consolidating is a perfect way to get ahead.

Source: RACQ