Refinancing
If you've had your current home loan for a while, your needs may have changed, or your loan may not have the flexible features or add-ons that have since become available.
If you find a better loan that meets your needs, consider refinancing. Refinancing involves replacing your current mortgage with a new one. It might shorten the overall duration of your loan and lower your payments so you can afford to make additional mortgage payments and close on your home more quickly.
Why Refinance?
Refinancing your existing home loan can offer a range of benefits, including:
- Lower Interest Rates: One of the primary reasons to refinance is to get a better interest rate on your home loan. Lower interest rates can help you save money on interest charges over the life of the loan, resulting in lower monthly payments and potentially shorter loan terms.
- Improved Features and Add-ons: Refinancing your home loan can also help you access better features and add-ons, such as redraw facilities, offset accounts, or flexible payment options. These features can help you manage your finances more effectively and make it easier to pay off your loan sooner.
- Access to Equity: Refinancing your home loan can also give you access to the equity in your home. You can use this equity to borrow money for renovations or home improvements, invest in property or stocks, or even take a holiday or buy a new car.
- Debt Consolidation: Refinancing can also be a perfect tool for consolidating debts. By rolling all your debts into your home loan, you can simplify your finances and save on interest charges.
Steps to Refinance Your Mortgage
If you’re thinking about refinancing your home loan, here are some steps you can take:
- Check your current loan details: Before refinancing, it’s crucial to understand the terms and conditions of your home loan including interest rate, any fees or charges, and any penalties for early repayment.
- Research and compare lenders: Look for lenders that offer competitive interest rates, flexible loan terms, and features that suit your needs.
- Get pre-approval: This process involves submitting an application and providing financial information such as income and expenses, assets, and liabilities.
- Prepare your application: You will need to provide financial documents such as payslips, tax returns, bank statements, and proof of assets and liabilities.
- Choose a new loan and settle: Once your application has been approved, you can choose a new loan and the lender will provide you with a new loan contract. Make sure you read this contract carefully and understand the terms and conditions before signing.
- Inform relevant parties: After refinancing, it’s important to inform relevant parties such as your insurance provider and any direct debits or regular payments you have set up to ensure they are redirected to the new loan account.
Refinancing your home loan can be a smart financial move that can help you save money, simplify your finances, and achieve your financial goals.
So, don’t hesitate to explore your options and take control of your finances by considering a home loan refinance!