People often ask: when’s the right time to refinance? This is a sensible question, as there are many things to consider when looking at refinancing. It’s important to not only consider the total cost of refinancing, but also to consider the possible loan features that you could take advantage of when you refinance your mortgage.
Firstly you need to identify what you are trying to achieve by refinancing your mortgage. Refinancing your mortgage can save you money, lower your repayments and free up cash to use for a variety of reasons. Determining what you would like to achieve with refinancing will help you decide when it’s the right time for you to refinance.
1. Should I refinance to consolidate high-interest debts into my home loan?
If you’re carrying high interest rate debt on credit cards, personal loans or store cards, it is usually well worth refinancing them into your home loan, as you will end up repaying the debt at a much lower interest rate which means you can save money. Not to mention it’s a lot easier making one monthly repayment rather than five.
2. Should I refinance for a lower interest rate?
Before you refinance your home loan to access a lower rate, make sure you calculate all of the fees and charges associated with refinancing to ensure the benefits will outweigh the costs in the long-term.
3. Should I refinance if I’m renovating?
When you are renovating your home you’re of course going to be in need of extra money. Refinancing your loan is a perfect way to unlock some cash from your home to pay for the contractors, fixtures and fittings not to mention get a better loan while you’re at it.
4. Should I refinance for a more flexible mortgage?
If you never took much notice of your current home loans features, it may mean you didn’t get the loan flexibility you want or need now. Refinancing your loan now may be the perfect time, because you know exactly which loan features you want, and you’re probably well aware of the loan features you don’t use.
5. Should I refinance to access my equity?
You can access the equity built up in your home for reasons such as renovation, to take a holiday, buy a new car, or even to build your investment portfolio.
6. Should I refinance if I can’t afford my mortgage?
If your circumstances have changed and you are finding it difficult to comfortably meet your mortgage repayments, you can look at refinancing your home loan to reduce your monthly repayments. You could even switch two a more basic home loan, with less loan features and therefore a lower interest rate.
7. Should I refinance because I’m not happy with my current home loan lender?
There are many bank and non-bank lenders with great refinancing loan products, if you’re not happy with your current lender, let us know and we’ll source a new lender that suits your needs.