Are you looking to consolidate your debts? Wanting to take advantage of lower interest rates from another bank or getting another loan to pay off your current one? Do you wish your current lender’s interest rate were a bit more competitive?
If so, refinancing your home loan might be something you would want to put on your radar. In fact, you may be looking at a refinance home loan offer right now and are deciding on whether or not you should take the plunge.
With the current economic climate, more people are considering to refinance home loan because of the saving opportunities it can deliver.
All your questions about refinance home loan Australia
You may find yourself asking questions like what should I look out for when refinancing loan? Where can I find competitive refinance home loan rates? Should I refinance my mortgage, and is it worth refinancing?
When it comes to refinancing your mortgage, there’s a lot of information out there. If you’re new to refinancing and/or keen on knowing more, stick with us and we will answer some of the most frequently asked questions around home loan refinance.
What is refinancing?
Refinancing is the process of taking out a new mortgage, potentially with a different bank or lender, to repay your current home loan.
Refinancing gives you the opportunity to reduce your repayments and an avenue to access unused equity in your home loan to finance your next investment property or your house renovation project. It also can be a smart way to manage your money and secure a better deal.
You can refinance with your current lender, or you can switch to a different one. Doing so could save you thousands of dollars over the term of your loan. In fact, you may be able to access between $2K-3K in cash back refinance home loan deals from some lenders who are offering this type of incentive.
How to refinance a home loan?
Whether you want to get a home refinance loan with your current lender or switch to a different one, the best way to go about it is to talk to a mortgage broker.
Mortgage brokers have an intimate understanding of refinancing and have access to some of the best home refinance loan rates from across their panel of lenders. They will get an understanding of your borrowing capacity, find out what deposit is required, determine which home loan product would best suit your circumstances, scour for competitive interest rates, and do the bulk of research for you.
Should I refinance my house?
There are many reasons why homeowners would consider refinancing:
- Lower interest rate
- Finance for house renovation
- Tap property equity to invest, renovate, or go on holiday
- Debt consolidation
Depending on the urgency of your financial goals, it is never a bad idea to look at refinancing as a means to achieving them.
How long does it take to refinance home loan?
Before moving ahead, review your current home loan, analyse its disadvantages, and check the market for better deals. This process could take a few weeks, but mortgage brokers can expedite the process.
Costs to refinance home loan
A huge advantage of refinancing is having access to a different rate structure. This could mean switching to a variable rate mortgage from a fixed rate mortgage, changing the terms of your loan
Although the objective of refinancing is to save money, you might end up spending more if you do not understand the monetary implications of switching loans like break fees and other charges.
To avoid this, best to talk to your mortgage broker so they can manage the transfer process and get rid of these inconveniences.
Is refinancing worth it?
The biggest factor to consider when tackling the need to refinance is if your current home loan is still meeting your needs. While you may be happy with your current lender or your current mortgage structure, do they have new and better rates that you ought to know about but are not being offered to you? Are you finding it more difficult to manage your payments because of your lifestyle changes?
Refinancing is worth it as long as it fits the needs of your current situation and if you understand the fine print of your existing mortgage plan and that of your new one. This is so you can avoid incurring charges that could offset your potential savings from refinancing.
You must also analyse your borrowing capacity and check your credit score to see if you qualify for a new mortgage.
When is it worth it to refinance a mortgage?
To best answer this question, the first thing you need to do is to review your current home loan and compare its rate to the ones currently in the market.
A home loan health check done by a trusted mortgage broker would help you narrow down your questions and clear up any confusion around your home equity and available finance options.
Read: Benefits of a home loan health check
Below are questions you need to ask yourself to know when’s a good time to refinance:
- Has your interest rate increased?
- Is your fixed loan period coming to an end?
- Have you had any change in your financial situation or life plans?
- Are you being charged a loyalty tax by your current lender?
- Is your loan-to-value (LVR) still above 80%?
Got more questions?
Stryve Finance specialises in refinancing, and we will assess your current financial situation and understand your refinancing goals to make sure you get the best solution for your needs.
If you’re thinking about refinancing your mortgage, Stryve Finance would love to help. For expert advice from a team that cares, please contact us today.
