Homeowners put a lot of time, effort, and money into getting the keys to their home. Long after you’ve settled into your new home, Oz Lend is committed to helping you to make the homeownership process as affordable as possible. One way we do this is by educating you on how to effectively refinance your Melbourne home loan.
Here are five benefits you will see if you refinance your home loan.
Lower Monthly Payments
Netting a smaller monthly payment is one of the main reasons for a person refinancing a mortgage loan. It’s best to check the most recent mortgage rates before refinancing to make sure they’re lower than your current rate. Even a single percentage difference can have a significant impact on your financial future. As loan refinancing fees are involved, you should include these as well as interest rates when determining the viability of refinancing to reduce monthly mortgage repayments.
Develop Equity Faster
It may sound a little unusual, but for some homeowners, refinancing a loan with a shorter term, which comes with larger payments, maybe a brilliant idea. This approach leads to a rapid increase in your level of equity in the property as you will be repaying the principal component of your loan much faster. If you utilise fixed interest refinancing and rates subsequently rise, you can also save a considerable sum of money over the remaining life of the loan.
Stabilise payments from your loan
Consider loan refinancing to a fixed-rate mortgage if you already have a variable rate mortgage and want fixed loan payment amounts each month. This can help you budget better in the medium to long term and remove the element of risk of variable rates rising, thereby increasing your monthly repayments. This option is for you if you want to avoid risk and your income is mostly fixed and unlikely to see much in the way of upside growth.
Get the value of your enhanced credit score
While you may not like having to pay your mortgage each month, the more you make on-time payments, you will love the way it increases your credit score. You are in a better spot to refinance your mortgage in the future at a lower interest rate, with a better credit score. Choosing a cash-out refinancing option will improve your credit score even more if you use it to pay off your credit card debt and other loans quicker.
Pay off the mortgage sooner
There’s no better feeling than having access to more of your earnings to use as you see fit. Having one less monthly payment to meet helps you feel that much more in complete control of your finances. If you can afford to do so, the lower-term refinancing of a mortgage helps you to pay off the mortgage and become a true homeowner far sooner.
If it has been a few years since you first obtained your mortgage loan, now may be the ideal time to consider refinancing your home loan. To make the right choice for yourself, your finances and your family, the assistance of a mortgage advisor is recommended. Call Oz Lend today on 1300 438 669 to arrange a meeting to discuss your options.