How long ago did you take out your home’s mortgage? Was it five years ago? Ten years ago? Twenty? And are you still happy with the term of your mortgage and the repayments as they stand? Well, to be honest, you shouldn’t be. While not exactly like computer technology which seems to change almost every day, home loans do evolve.
Reconsider, then refinance
It’s quite possible you’re now paying more than you need to if changes in the local economy or increased home loan competition amongst banks have created a leaner loan. Or maybe your personal circumstances have changed to the point where you could afford to pay more. Perhaps you no longer have the added overheads of young children or you’re in a more lucrative job. Whatever the obvious signs of change, you should definitely have a fresh look at your loan arrangement and seriously consider refinancing.
Can refinancing save me money?
Yes, there’s a very good chance it can. If interest rates and fees are now lower than your current mortgage, you’ll not only save money; you might even pay off your loan faster and be debt free sooner! How nice would that be?
What if the value of my property has gone up?
Even better! And as house prices tend to keep increasing, there’s a strong chance your home will now offer you considerable additional equity. You can refinance and use that equity as an investment in the future for the kids’ education or some other worthy project.
Can I consolidate debt?
Yes. You might have nasty credit card debts and other small loans floating around. While in isolation each one may be an irritation at worse, the accumulative effect of small debt repayments can become a major burden when repayments are added up. Refinancing might allow you to consolidate all those little debts into your home loan, so you only have one debt and one very manageable repayment.
Will there be penalties to end my old loan?
It’s unlikely unless you are on a fixed rate but even if there is, we can take this into account and, if we can find you the right refinanced loan, there’s a good chance the savings will more than offset the costs.
So when is refinancing a good idea?
These are the main reasons you should consider refinancing.
- Your lender’s rate is no longer competitive
- A major change has occurred in your financial situation, be that better or worse
- You’re looking for more money to pay for something major like a home renovation, a child’s education, or another property investment
- You want to switch to a fixed rate at an opportune time
- You’ve accumulated credit card debts and want to consolidate
- You’re finding it tight with your current repayments and lower repayments would make a big difference and save you from falling into financial stress.
If one or more of those scenarios applies to you, talk to us and we’ll delve deeper to see what benefits you’d gain by refinancing.
When is refinancing a bad idea?
If any of the following apply to you, refinancing might well do more harm than good.
- You aren’t going to own the property for much longer
- Break costs are high on your existing home loan
- Since your previous loan, your credit history has taken a hit due to outstanding debts, making it less likely you’ll get a good rate
- You’ve don’t have a reliable source of income over the period of the loan due to freelancing or some other job where payments are erratic
- Your loan balance is low, and you don’t want to redraw on available equity
Does bank loyalty count for anything?
If that means getting a better-refinanced loan with your existing bank, no. And we do understand that you might have been with the same bank all your life and feel some sort of attachment. That might be a people thing at your local branch or just a sense of security you’ve built up over time banking with that brand. Truth is, your bank might no longer be competitive. All kinds of lenders have probably sprung up in the interim, and all manner of loans have made the market much more competitive.
So how do I find a great deal?
That’s the hard part. Trying to compare interest rates, fees, loan duration, total loan costs and all the other ramifications is no small task and will probably confuse rather than clarify. Fortunately, we can help. At FinancialPlus, we have one of the most skilled loan researchers in the country. We also have an extensive background in banking, so we’ve got all the bases covered when it comes to nutting out the best refinance arrangement for you.
Refinance and refresh your world
Refinancing can be a bit like winning the lottery; well, Division Two, anyway! Suddenly, without changing jobs or making any physical alteration to your lifestyle, you could have more money in your pocket. Just imagine – own your own home sooner or just have more money to enjoy life with.
If you’d like to chat about your refinancing options, call us at 07 5564 5903 or make an enquiry.