If you want to take the edge off the interest you are paying on your loan switching your lender through refinance of home loan might be a brilliant move.
The best thing about home loans; you always have the option to switch through refinancing. With so many lenders and mortgage products on the market, lenders compete heavily when it comes to interest rates. The best mortgage broker would advise you to evaluate your current mortgage to ensure that you have the most competitive product on the market.
Refinance of home loan is the process of obtaining a new mortgage to repay an existing loan. This usually happens when there has been a change in your personal or financial circumstances, or simply because you want a better deal on your home loan.
Refinance of home loan can help you save money. When you want to refinance, you generally want to increase, decrease or keep the loan amount the same. There are many advantages to refinancing which include saving more money with lower interest rates, accessing extra features in your home loan, or managing debt by rolling them over in your mortgage. You may also use the equity in the property to fund another property, or you may renovate your existing property.
The first thing to remember while refinance of home loan is to check the costs by checking in with your current lender. The cost might vary because it hinges on the Terms and Conditions of your current home loan. You must compare home loan products to corroborate the fact that you can acquire a better deal than your existing mortgage. The best mortgage broker may do all the relevant work for you and give you tips insights and advice about refinance.
To be eligible to refinance of home loan preferably you should have less than 80% outstanding debt on your home loan. You are entitled to refinance after every six months but this comes with a catch. You will add an inquiry to your credit file every time you refinance. However, it is wise to refinance at the earliest depending on the amount of equity you have to use.
Refinance of home loan on fixed interest rates with its break cost and early exit fee isn’t advisable. Many people find it suitable if they can recoup these costs within two years of refinancing. Nevertheless, you should talk to the best mortgage broker if you are considering this option.
The various costs that might be applied if you refinance home loan are borrowing costs, loan-application fee, valuation fee, settlement fee, break costs, discharge fee, government fees to register and transfer your property, ongoing fees, etc which will depend on your mortgage, the applicability of lender mortgage insurance based on LVR, the bank chosen for refinancing, etc. It is best to take advice from your best mortgage broker to know which costs will be applicable and whether there is a way to minimize these costs.
In January 2021, $10.1 million worth of home loans in Australia were refinanced in just one month. In June 2021, that figure climbed to $17.4 million. We, at Nfinity Financials, work diligently to provide you with insights related to the housing market. If you want to refinance, we can investigate and shop around the mortgage for you, recommend the most suitable mortgage and do everything necessary on your behalf.