Insights on how to refinance, costs of refinancing your mortgage and more from a Mortgage Broker in Bunbury, Western Australia.
If you are a home-owner in Western Australia, reevaluating your mortgage and interest rate every so often is important to make sure you are saving money and getting ahead of your repayments.
If you are wondering what the benefits are of refinancing your home loan, then you can look forward to potentially.
sourcing a better interest rate,
accessing any equity,
consolidating debt you may have
What is involved with refinancing my home loan?
The process of refinancing your home loan means researching the different lenders and the terms they have on similar loans, or even speaking with your current lender for alternative products they may have newly available. Ideally, the interest rate and terms and conditions on the new loan will put you in a better financial and lifestyle position.
Your Mortgage Brokers at Allen Finance can compare different finance products and interest rates available and help you apply for the refinancing loan. There is a considerable amount of paperwork and documentation throughout this process and logistics in moving around bank accounts and money. This is all done safely and efficiently with friendly customer service with Allen Finance.
What is equity and how does it help me with refinancing?
One of the benefits of refinancing is potentially accessing the equity to be used for many different purposes.. Equity is the difference between the value of your home and how much you still owe on it and shows you and the bank how much of your home you actually own.
Aside from opening you up to improved interest rates, refinancing to access equity can also be used to obtain funds to buy another property, invest in shares, purchase a vehicle, caravan or boat or even complete a home renovation.
Pros and cons of refinancing your home loan in Western Australia
There are some key considerations when deciding whether or not to refinance, all of which your mortgage broker at Allen Finance can walk you through with a free consultation.
Drawbacks of refinancing your home loan:
Fees | there are several fees involved with refinancing a home. Some of which are application fees, valuation fees, exit fees from your current mortgage and potentially break fees depending on the terms of your current loan.
Longer loan term | Refinancing to get lower monthly payments can mean you end up with a longer loan term. Depending on your terms and repayments, this could result in paying more over the life of the loan due to additional interest rates
Credit score impact | Applying for a new loan can impact your credit score which can make it harder to get lower interest rates in the future
LMI | If you own less than 20% of your property outright, when you refinance your lender may ask that you take out Lenders Mortgage Insurance (LMI). This cost can vary.
Benefits of refinancing your home loan:
Lower interest rates
Debt consolidation | You can combine multiple debts into one loan, which can reduce your total interest paid.
Pay off your loan early | Depending on your repayment capacity, there is potential in reducing the length of your loan term, which can save you money on interest.
Switch between variable and fixed rates | A new lender and product might mean that you can choose between a variable or fixed rate loan, or split your loan between the two.
Access to different features | You can get access to features like redraw facilities or offset accounts
Equity release
Lower fees
If you are interested in finding out more about how to refinance your home loan in Western Australia, get in touch with a mortgage broker from Allen Finance for a free consultation.
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