Refinancing Home Loan
If you’re considering refinancing your home loan before here are some handy tips to help you get the best deal and avoid the home loan traps. Most people with a home mortgage, from time to time are tempted to refinance – especially when interest rates start falling or increasing.
But will refinancing save you money in the long run? Or – if you refinance your home loan will it cost you a bucket in exit penalties? Many people think that refinancing their home mortgage will instantly save them money. It certainly may do but for many it isn’t worth the effort.
When it comes to working out whether or not to refinance and then which type of home loan to refinance to, home loan packages vary so much it can be confusing knowing which mortgage is right for you.
Before you take that next step to refinance your mortgage there are a number of questions to consider. Here are some tips to look out for when if you are exploring the opportunities to refinance your home loan.
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What are the early payout penalties and exit fees like?
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Does the new mortgage offer you the flexibility you’re looking for in a home loan?
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If you are considering refinancing does it offer you the flexibility you need?
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If you refinance will you need to take out costly mortgage insurance?
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How much will the financial institution lend you on your home mortgage?
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Why do you want to refinance? Be very clear on what you want to achieve by refinancing. You see, refinancing your home loan does not pay off your loan for you – it simply re-arranges it so it’s more manageable for you to service. Often when people refinance they extend the term of their loan to 30 years which lowers repayments but it does nothing for reducing overall debt. Or are you refinancing your mortgage because you’d like to bundle all your credit card and personal debts together into one loan at a lower interest rate? If so, that’s a great reason to refinance because it will save you a small fortune in loan interest.
Types of loans you can refinance your home loan to?
There are two main types of loans for you to consider when refinancing your home loan:
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A variable rate loan is great for a high interest rate economic climate because they are offered at a much lower interest rate than a fixed rate loan with a 30 year term.
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A fixed term loan is often most appealing when interest rates are low because you can fix the repayments at the lower rate for up to 5 years.
Before you decide to refinance your home loan, talk to a Wealth Concerns mortgage broker who can help you determine which refinancing mortgage options are right for your situation.
Contact Us
If you would like to discuss your specific circumstances call us on 1300 700 496 or alternatively text your name and number to 0411 320 962 and we will call you.