Looking to refinance or repricing?
Refinancing or repricing could potentially save you thousands or hundreds of thousands over life of the loan!
In a rapidly changing mortgage market, the loan that you committed to many years ago may no longer be right for you.
That’s why it’s important to shop around for a deal that suits your current needs.
The home loan you have might still meet all your requirements in terms of features and rate.
Alternatively, switching to a new loan or lender (or both) could save you money at a lower rate.
There are several ways how refinancing or repricing can help you!
By getting a reduced interest rate
First and foremost, it can reduce your interest rate, which in turn lowers your monthly mortgage payment and the total amount of interest you pay over the life of the loan.
For example, if you refinance from a 30-year fixed-rate mortgage with an interest rate of 4.5% to a new 30-year fixed-rate mortgage with an interest rate of 3.5%, you could save thousands of dollars in interest over the life of the loan..
NOTE: You need to keep in mind that refinancing may come with costs – mostly discharge fees for the old loan and application fees for the new loan. Depending on your circumstances, these costs may differ among lenders, so make sure you do your research before refinancing.
Want to discuss out how much you could save by refinancing or repricing?
Consolidating debt by refinancing a home loan
Probably you have a home loan, a personal loan, and maybe even a credit card balance, like many Australians. When you have multiple debts, you have to manage many different repayments.
By refinancing your home loan, you can streamline your debt and potentially reduce your overall interest costs by consolidating multiple debts.
However, debt consolidation could have some downsides. You may end up paying interest on the balance for a much longer period of time than you would for a short-term debt such as a personal loan, which can cost you more in the long run.
If you want to consolidate your debt effectively, you must make additional payments to pay off the larger loan as quickly as possible.
Every individual scenario is different. Talk to us today to find out what could be the right option for you.
Cash back incentives can help you save money
As bank competition increases, some lenders may actually give you money for refinancing your mortgage. Considering a cashback product while refinancing could be worthwhile.
You should be cautious of deals that seem too good to be true. These gifts may sound enticing, but it is important to remember that selecting a home loan is an important decision, and you should base your decision on factors such as interest rates, fees, and loan flexibility.
Switching between variable rate mortgage and a fixed-rate mortgage
Refinancing can also save you money by allowing you to switch from a variable rate mortgage to a fixed-rate mortgage.
With variable rate, your interest rate can change over time, which can cause your monthly mortgage payment to fluctuate. By refinancing to a fixed-rate mortgage, you can lock in a lower interest rate and protect yourself against future rate increases.
But it is not always a good idea to switch even when the offer is lucrative. There could be other factors involved too and would depend on individual circumstances.
Overall, refinancing can be a great way to save money on your loans, but it’s important to carefully weigh the potential benefits against the costs and potential risks before moving forward. It’s always a good idea to consult with a financial advisor or mortgage lender to determine if refinancing is right for you.
FAQ
Most frequent questions and answers
Your existing home equity can be used to refinance. There may be a requirement to put down 10% of the property’s value if the value has changed significantly.
The process for refinancing a loan typically involves applying for a new loan and using the funds from the new loan to pay off the existing loan. This may require a credit check, proof of income, and other documentation to verify your financial situation.
Fees associated with refinancing a loan can include closing costs, origination fees, and prepayment penalties. These fees can vary depending on the lender and the terms of the new loan.
Eligibility for refinancing a loan typically depends on factors such as your credit score, income, and existing debt. In general, to be eligible for refinancing, you need to have a good credit score and a stable income. It’s always a good idea to shop around and compare offers from different lenders to find the best deal for your situation.
Whether refinancing is right for you will depend on your individual circumstances. Some factors to consider include your current interest rate, the amount of equity you have in your home, and your financial goals. It’s a good idea to consult with a financial professional or mortgage lender to help you evaluate your options and determine if refinancing is a good choice for you
To start the refinancing process, you’ll need to shop around for a new loan and compare rates and terms from different lenders. Once you’ve found a lender and a loan that meets your needs, you’ll need to fill out an application and provide the necessary documentation. This typically includes proof of income, proof of assets, and other financial information. The lender will then review your application and determine if you’re eligible for refinancing.
Yes, it is possible to refinance your mortgage even if you have bad credit. However, you may have a harder time finding a lender who is willing to work with you, and you may have to pay a higher interest rate. It’s a good idea to work on improving your credit before you apply for refinancing, as this can make it easier to qualify and get a better rate.
Yes, it is possible to refinance your mortgage even if you’re behind on your payments. However, you may need to bring your loan current and show that you’re able to make your payments on time before a lender will approve your refinancing. This can be a challenging process, so it’s important to work closely with your lender and take steps to improve your financial situation.
Yes, it is possible to refinance your mortgage even if you have a lot of debt. However, having a high debt-to-income ratio can make it harder to qualify for refinancing and can result in a higher interest rate. It’s a good idea to work on paying down your debt and improving your credit score before you apply for refinancing.
Yes, it is possible to refinance your mortgage even if you’re self-employed. However, you may have to provide additional documentation to prove your income, such as tax returns or profit and loss statements. It’s a good idea to work with a lender who has experience working with self-employed borrowers to help make the process easier.
