Refinancing can be a big step to make, and one that a lot of people shy away from due to fears of making their debt worse. But done properly, with the help of local mortgage brokers, taking out a second mortgage on your home can free up equity, ease the monthly repayments and consolidate any other debts that you might have.
While refinancing is not as complex or as difficult as you may think, it is still important to consider when it is the right time to take this step.
When does refinancing work for you?
The primary reason that people decide to refinance is to reduce the interest rate on their current mortgage.
When first taking out a loan, particularly if they do so while young, people do not have as good a credit score as they do after 10 years of timely repayments. This better credit score can lead to lower rates as lenders develop greater confidence in you.
Another reason is the consolidation of other debts. Credit cards are the usual culprit, and refinancing allows you to pay off these outstanding debts all at once and simplify your repayments into a single source. Often you are able to get a lower rate on your refinancing loan compared to your other debts, so at the end of the process you are paying less than keeping to the complex multiple source method.
Very often, people want a little bit of extra money in their pocket. Taking out another mortgage can leave you with a lump sum to do with what you like. Maybe you want to renovate your home or put down a deposit on another property, or even do something as simple as going on holiday. There are as many reasons as there are dollar coins to want a little bit of extra spending power, and refinancing can give it to you.
More people than ever are refinancing
With the Australian Bureau Statistics reporting an increase of 1316 refinanced homes in October compared to last year, it is clear that more and more Australians are learning that refinancing is not as difficult as they first thought.
Whether you want to consolidate, renovate or depreciate your mortgage repayments, refinancing may be an excellent option for you. Come and talk us to see if you are eligible for a better mortgage rate and simpler repayments. With years of experience as expert mortgage brokers, we can ensure you find the right loan.