Refinancing: It's Not Just About Interest!
Is a better interest rate at the top of your home loan refinancing wish list?
If it is, you're not alone. Every year, many Australians take a look at their mortgage and dream of getting a better deal.
And who could blame them - or you. A lower interest rate could reduce your monthly repayment, let you save more or shave years off the length of your loan.
Yet did you know that the interest rate is just one thing you could potentially change about your mortgage for the better?
It's true. Loans aren't as complex as some may claim, but they do have a few moving parts that with the help of a mortgage broker you may be able to tune up so that the whole package works better for you.
Something just as important, if not more so, than finding a low interest rate could be ensuring that you are able to make extra repayments in the future.
These can have a big effect on reducing the amount of interest you are charged over the term of your loan, yet not all loan products will let you make them.
Putting an unexpected windfall such as an inheritance or a tax refund towards your mortgage is a great way to make interest savings - but only if your loan allows it.
Refinancing to make your loan more flexible could be a good idea if you seek some more latitude in being able to contribute extra towards your loan when you can.
It could also allow you to adjust your repayment strategy when there are changes in your financial circumstances.
For example, if you start a new job and move from being paid monthly to being paid fortnightly, you may wish to change your repayment frequency to match.
If you wish to learn how you may be able to refinance in order to make your home loan a better match for your current situation, it is a good idea to speak to a mortgage professional.
A mortgage broker can give you a broad picture of all the loan products available to you and also zoom in on the minute details of loan structure so that you can make an informed decision about all aspects of your home finance.
Just as important, they can examine your current loan and advise you on whether you are taking advantage of features already at your disposal.
Refinancing can be an excellent way to get on track to achieving financial objectives, yet it may not necessarily be right for everyone. Speak to a home loan specialist to find out more about your options.