People talk about refinancing their home loan quite often these days, but it can become quite confusing to know when the right time is to refinance. It is important to regularly review your financial and personal situation if you want to take advantage of the best deals and pay off your mortgage sooner.
So when is the right time?
The answer is quite a simple one... whenever it makes financial sense to do so! We recommend conducting a mortgage health check every 12 months or so to see what else is on the market and how your loan compares. Let Verve Group Finance do the hard work for you, give us a call on (08) 8120 4877 or email firstname.lastname@example.org if you'd like a complimentary mortgage health check.
Here are some of the main reasons Aussies choose to refinance:
The most common reason for people to refinance their mortgage is to get a better deal. A lower rate means you could potentially save thousands over the course of your loan, and put that money towards something else in your life.
Don't get caught in the trap of becoming fixated purely on interest rates, as there are other factors that need to be taken into consideration such as exit fees and charges for taking out the new mortgage. We'll help you to take into account all costs, so you can be sure that you'll be better off in the long run.
Many basic home loans do not have the available features that are attractive to people that have been paying off their home loans for many years. People typically discover that they don't have these features available to them when it's too late, and are told by their lender that they will face a hefty charge if they try to change it up.
An example of this a redraw facility - the ability to pay extra money into a mortgage and then redraw it later. Gaining access to flexible features such as a redraw facility is also a common reason why people refinance their mortgage.
If you're thinking about renovating your existing home, it often makes financial sense to take out a construction loan so you only pay interest as building progresses. After you've finished building, it might also make financial sense to refinance your loans by consolidating the total amount you owe to minimise your overall interest bill.
In recent years in the property market, houses have appreciated at a significant rate. The house that you bought for $350,000 five years ago might now be worth $500,000. Refinancing your mortgage with a home equity loan might let you tap into that extra $150,000 equity.
It can be difficult to distinguish when is the perfect time for you, so the best idea is to talk to a mortgage broker who can help you to understand whether there is a better deal for your personal circumstances. If you'd like to have a chat, call (08) 8120 4877 or email email@example.com