We hope for better things in life – a good home, a big car, a flourishing career and more. Life becomes stagnant if we do not aspire to change who we are and what we have. If you want to improve your position in life, freeing up more discretionary funds can provide you with greater opportunities. One way to do this is to seek a better home loan to replace your existing mortgage loan. It’s here that home loan brokers can help you!
If you are still on your original loan for more than a year or two, you may be surprised at the amount you can save if you take steps to refinance your home loan. Even if you have previously been through a process to refinance your home loan, it may now be time to assess again whether a better deal may now be available.
Any Melbourne home loan broker can help you approach a new lender to refinance the balance outstanding on your current loan. The objective will place you in a better financial position than where you currently sit.
What is Home Loan Refinancing
Refinancing is the process of replacing an existing loan with a new one and avail additional benefits such as a lower interest rate or more flexible repayment schedule.
Australians have the option to switch their home loan with a lower fixed interest rate, a loan with lower fees, or with a reduced repayment period for the same level of current repayments. Whilst individual financial institutions can refinance a home loan, a Home Loan Broker in Melbourne offers you a comprehensive range of potential deals. Home loan brokers allow you to compare a wide range of home loan refinancing options from any financial institution.
Why Do People Refinance their Home Loans
The following are some of the most common reasons people refinance their home loans;
- Access a lower interest rate
- Reduce the cost of home loan fees
- Shorten (or extend) loan’s duration
- Consolidate various debts into a single, manageable payment plan
- Release equity to use for other purposes
- Increase household cash flow
Factors to Consider when Refinancing a Home Loan
One of the major factors to consider is the benefits you seek through refinancing. It should outweigh the existing costs of your mortgage, so you can get a fresh home loan from a new lender.
A Home Loan Broker helps you discover the bank fees, legal and insurance costs and Government charges. They consider the impact of any proposed refinancing on your long-term financial goals. Moreover, brokers can assess the impact of a proposed refinancing on any other property loans you may be servicing.
How Does Loan Refinancing Work
Refinancing means when the new lender pay off your debt to your former lender and take up the remaining loan balance as a new mortgage loan. Home Loan Broker helps you choose the right lender and loan product, you only need to complete the paperwork and other formalities. When you complete the formalities, your new lender can pay off the old debt. You would then begin making monthly repayments to the new lender under a new mortgage loan.
When to Refinance
It’s important to keep an eye on the health of your finances. This helps you grab every opportunity to improve your financial position. One of the worst mistakes homeowners make is to set and forget their home loan. This is an unfeasible and expensive strategy to adopt for the duration of any home loan. You may end up thousands of dollars before you can own the home. If you own your home for more than a few years, you should approach a Melbourne Home Loan Broker. The broker will review your situation and check different loans to see if there’s a better deal.