If you have had your current home loan for a number of years, it is likely your needs have since changed, or you may be missing out on flexible features or add-ons that have since become available.
Refinancing your home involves paying out your current loan with a new one (in many cases, with a different bank) – which may allow you to select certain features that better suit your lifestyle, your wants and your needs.
Here are 8 reasons why you could consider refinancing your home:
Your interest rate will have a significant impact on how much you actually pay on your mortgage. If you have had your loan for a number of years, you may be paying loyalty tax. This is when lenders charge long term customers a higher interest rate, compared to new customers. Securing an interest rate just 0.5% lower than your existing loan, can see you save thousands, ultimately resulting in your loan being paid off quicker, and who doesn’t want those extra dollars in their pocket?
It is important to remember your home loan is more than the interest rate – All lenders measure their rates differently, which is why it is so important to speak with a Lending Specialist or Mortgage Broker to ensure you are reviewing all aspects of the loan before making the change.
It is likely that your personal circumstances will change over the course of your home loan and you may need to alter your loan accordingly. When getting your home loan years ago, it may have included features that no longer suit you today, or you have found that over time, the features on your current loan are just not being maximised. Adding or removing features to better suit your lifestyle can help give you the flexibility you need. There are a range of features available to you, including flexible repayments, redraw facilities or even offset accounts. As always, it is best to consult our team of Geelong Mortgage Brokers to explore the best path for you.
Fixed rates work really well in the right situations however upon the end of your fixed rate term, you will be transferred to a higher variable rate by default. However, refinancing your fixed loan once it has ended, may see you avoid having to pay any associated fees with leaving a fixed home loan early.
If you want to access your home equity, refinancing is the way to do it. Your equity is the portion of your home that you own outright. You can calculate your equity by subtracting your remaining home loan from the balance of your home’s current value. Accessing your equity can then help fund major purchases or investments.
Refinancing your home can help you maximise your equity on your home. You could then use those funds to invest in real estate, shares, or other opportunities.
Enhance your property’s value and move closer to achieving your dream home by undergoing renovations on your property. To avoid having to take out a new loan to fund your renovations and ensuring your savings stay in your bank, think about using the equity in your home which can be unlocked by refinancing your home.
You may have other debts, including personal loans, car loans or credit cards.
Debt consolidation involves combining those other debts with your home loan. This simplifies repayments and makes managing your repayments more convenient.
You may not be 100% satisfied with your current lender. This could be in due to a number of factors, some of them being: inadequate website, mobile app or in person services, inflexible repayment methods or a negative experience with the customer service provided. Whatever the reason, if you do decide to refinance based off the lender, ensure you are taking into consideration all aspects of the new loan and not just the lender.
If you are considering refinancing your home loan, there are steps you need to take to ensure you are eligible to do so. Our team of Geelong Mortgage Brokers are dedicated to helping you ensure your home loan journey is as simple and stress free as possible. We have access to a range of home loans offered by banks and non-banking lenders, to ensure we find the best suitable option for you.
Take control of your financial future by meeting with our team of Geelong Mortgage Brokers and home loan specialists at The Hrkac Group. Make an appointment today via our Contact Us page, or phone us on 03 5224 2366.