Home Loan Refinance - A smart move
Are you feeling the financial strain of high interest rates on your mortgage? Aus Wealth Loan Specialists is here to help!
Refinancing your home loan can be
beneficial to you in many ways
There is a whole variety of reasons why you should refinance your home loan or consolidate
other debts into one easy-to manage loan reducing your overall financial commitments.
Refinancing your home loan to secure a better interest rate
Homeowners can refinance their existing loans to a new lender to secure a lower interest rate and reduce their monthly interest repayments, saving thousands of dollars in interest. Lenders usually have very enticing deals for their new customers, and the average interest rate offered to a new home loan customer is often much lower than the average rate offered for the existing customers.
Refinancing home loans
Refinancing your home loan for Debt Consolidation
You may have multiple debts to manage apart from your home loan account – Personal loans, a car loan or credit card, which may be at higher interest rates. Refinancing your home loan allows you to consolidate any short-term high-interest debts into one easy-to-manage loan at a lower rate saving thousands of dollars in interest whilst improving your monthly cash flow.
Refinancing your home loan to access equity
Borrowers would like to know how much equity they can unlock with home loan refinancing. Refinancing allows you to tap into any home equity you have built over the years. Through accessing equity, you have the opportunity to achieve your investment goals and build additional wealth.
Does your home loan's high-interest rate stress you out or your fixed-rate
home loan period about to end ?
You may have seen lower interest rates at another financial institution or might want to learn more about a way out of your home loan stress. In this situation, refinancing may prove to be a wise decision. Despite higher interest rates, many home loan borrowers suffer from the notion that there is no point in refinancing a home loan to save money. Even many relatively new borrowers wrongly believe that refinancing a home should only happen if they have repaid the home loan to a significant extent. By contrast, making the right decision to refinance your home loan can potentially save you thousands of dollars in interest repayments and boost your financial health. The lower interest rate could add financial flexibility to suit your changed lifestyle or circumstances.
Is it time for a refinance?
If you have owned your house or property for a long time and have built-up equity, that will make refinancing easier. The most obvious reasons to refinance are saving on interest, accessing home equity, consolidating other debts and having better loan features. Refinancing your current home loan to a lower interest rate also allows you to build equity in your home quickly.
What does refinancing a home loan mean?
Refinancing is settling your existing home loan in full by taking out a new home loan either with your current lender or from a different lender.
Significant changes in your life, planned or unexpected, could mean that your current loan no longer suits your needs. Whether you are starting a family or you are expecting a significant increase in your income, allows you to find a better deal in the market.
How does home loan refinancing work?
Refinancing at a lower rate will reduce your home loan repayments, so you can afford to make additional repayments and pay off your loan sooner.
However, refinancing your home loan could come with other costs, so it is crucial to understand the interest saving and other financial benefits against the costs involved in switching home loans. Generally, if you have less than 20% equity in your home, you might have to pay the lender's mortgage insurance (LMI) to the credit provider. Furthermore, you may have to pay other loan amounts or a break fee if you are on a fixed-rate loan. Exit fees don't include break costs, which can be imposed if you pay out a fixed-rate loan before the fixed term expires. Also, you have to pay mortgage discharge & registration fees when registering the new mortgage under your property.
We can help you minimize these charges in many ways by arranging finance through lenders who sometimes offer special cash-back when refinancing.
Frequently Asked Questions
Do I need to appoint a solicitor or conveyancer for home loan refinancing?
Hiring a solicitor or conveyancer may not be necessary when you refinance your home loan, however, always seek professional legal or financial advice if you have any concerns.
Do I need to put down a deposit when refinancing a home loan?
Refinancing an existing home loan usually does not require a cash deposit. Instead, equity in your property is one of the factors that will determine your eligibility to refinance without incurring any additional fees like lender's mortgage insurance (LMI), and acts in the same way the deposit did when the home was initially bought.
How much equity is needed to refinance a home loan?
You can refinance any time if you have at least 10% equity and good credit history. There may be other requirements depending on lender's credit policy . It would be perfect if you have 20% equity in your home which could avoid taking lenders' mortgage insurance.
Can I refinance a fixed home loan?
Yes, you may refinance fixed-rate home loans. However, there might be break-fees if you end the home loan before the expiry of its fixed term.
Our refinancing due diligence checklist will thoroughly cover everything you need to know before refinancing your home loan. We can support you in finding eligible home loans with your current lender or find the best deal with a new lender in the market. To understand the monthly repayments with different interest rates and the benefits of refinancing, you can use our Loan Repayment Calculator.
