Thinking about refinancing? For some, it can be a difficult choice. When you see a better rate available, that doesn’t necessarily mean you’ll end up saving money by switching. However, you can end up saving thousands, if not tens of thousands of dollars, if you refinance for the right reasons and at the right time. If you’re unsatisfied with your rates or looking for a better customer service, you’re definitely not alone for there are always plenty of borrowers looking for a better deal.
Refinancing may look like a good idea at a quick glance because it involves taking out a new mortgage and using those funds to pay off your existing mortgage. Though it can save you money, it also has its drawbacks which need to be carefully considered before moving forward. Read this guide to refinancing and speak to your mortgage broker to help you decide whether it’s right for you.
You might refinance because you want a lower interest rate. This is considered one of the most common reasons why people opt to refinance their mortgage. Refinancing can assist you to pay off your home loan sooner, possibly saving you thousands of dollars. Well, that completely makes sense but it’s a good idea to speak with your broker before taking any action. Your mortgage broker can help you look for a better interest rate and find the type of lending facility that is suitable for your lifestyle or lending needs.
This may actually open you to renegotiating a better deal with your existing lender, from which your broker will help you with the right advice. Remember that there are different mortgage products and not all are the same. You must carefully take note of the interest rates, fees, and the features and your broker can help you navigate the options.
You might refinance because you want to change your loan type. To lock in a low-interest rate, you may want to change from a variable loan to a fixed loan with your current lender. This may require refinancing into a different product depending on the type of mortgage you have. If you also want to switch into a split loan, you might also need to refinance.
You might refinance because you want to renovate or purchase an investment property. Refinancing might also be an option for you if you want to renovate your home or buy an investment property. You may be able to access some of your home’s equity, given that you have equity in your home, through refinancing your mortgage. You can get advice on the best option for you from your broker. Your home may need to be revalued and you will be advised by your broker as to how much you can borrow before refinancing.
You might want to refinance because your personal circumstances have changed. If your situation has changed, refinancing may be suitable for you. You may be able to merge other debts including your personal loans and credit cards, lowering your monthly payments and saving you interest, by taking out a new mortgage through your current broker.
There are a lot of reasons why you might want to refinance your mortgage. Though refinancing can save money, it’s not right for everyone. Be sure to consider your financial situation and assess for yourself whether it is right for you. It’s important to speak with your broker to help you choose the best loan product for your needs.
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