12 Feb Refinancing Your Mortgage
It might be your first home purchase, or you might have lots of investment properties on the go. No matter where you’re at on your property investment journey, it’s important to know when is the right time to refinance, and when it might not be such a great idea.
Reasons to Refinance Your Property
Here are some of the reasons why you might consider refinancing:
- Securing a lower interest rate
This might save you money but make sure you weigh up the costs of securing a new loan (exit fees, new loan fees, account keeping fee etc) before assessing the real savings when refinancing.
- Switching between variable and fixed interest rates
Getting a different rate for your mortgage might not require a complete refinancing. By talking to a professional mortgage broker, there may be another way to switch between variable and fixed interest rates. hence might save you money and stress.
- Accessing equity in your property
This can be a positive strategy to access funds from your property to make renovation improvements or use to invest in more properties
- Consolidating debts
Some debts are good to consolidate but other debts will not be viewed favourably by your lender. Hence refinancing needs to be well-researched by a specialist mortgage expert.
Top tip – If you are refinancing to reduce credit card debt, make the move part of an overall budget overhaul, otherwise you may run the risk of creating more debt instead of less. The other downside of refinancing for debt consolidation is that it can turn a short-term debt issue into a long-term problem, due to more interest paid over a longer period.
Find A More Flexible Loan
It’s worth looking loans with these options to make your property loan experience a happier one:
- Flexible repayments
Making extra repayments with no additional costs can reduce your home loan significantly.
- Repayment holiday
Taking a break from repayments if need, or accessing reduced repayments to accommodate career changes or breaks such as maternity leave, can save you stress.
- Offset account
With a savings or transaction account linked to your loan, you can benefit from having the balance of the linked account deducted from, or offset against the balance of your loan, before the monthly interest charge is calculated.
- Redraw facility
This enables you to withdraw any additional repayments you make on your loan. It can be particularly handy if you need access to emergency cash.
- Flexible rate options
By dividing your rate between fixed and variable components, or making interest-only payments for some of your loan period, you could potentially save a good amount of money.
- Portable Loans
Want to take your mortgage with you when you move from one home to another? It’s possible if you talk to a mortgage specialist before refinancing.
Contact our team of mortgage specialists at [email protected]usfinancial.com.au or 0488 814 148 for an honest assessment of your existing loan(s) and let us explore some options to save you money and time.