There are a number of good reasons to refinance your current home loan
How long have you had your current mortgage for? Does it still meet your requirements? Are there certain features that you wish you had in your home loan? Or are their certain features that you could get rid of and stop paying for? Is your interest rate still competitive compared to what’s available on the market?
Reviewing your home loan is always a good idea. If you’ve had your mortgage for a while, then there’s a good chance your needs have changed and your interest rate may not be as competitive as it once was.
This is particularly the case when it comes to owner occupied loans. Banks tend to compete strongly for business in this area – especially if you’re borrowing less than 80% of your properties value.
Reasons for refinancing your mortgage could include
- Your current interest rate and fees might be too high. Refinancing to another lender with a cheaper rate and/or lower ongoing fees could save you money
- You might want to consolidate some debt into your home loan
- You may want to release equity to carry out some renovations on your property
- You might be interested in locking in a fixed rate loan
- You might be interested in releasing some equity for investment – whether that be for property investing or shares
- You might want to release equity for personal reasons – such as to purchase a car
Whatever you circumstance may be, we can look at your current loan and provide you with alternatives – if it’s going to save you money then you have nothing to lose.
Consolidating debt is a common reason why our Pass Go clients refinance their home loan. Merging all your liabilities into the one home loan could possibly save you a lot in reduced interest and ongoing fees. It can also help to focus on paying down the one liability rather than trying to juggle multiple debts.
How does debt consolidation work?
If you have enough equity in your home – some lenders will allow you to combine your personal debt into your mortgage.
There’s a couple of main benefits from this approach. Firstly – the interest rate on your mortgage should be lower than the interest rate on your personal debt which means you’ll save money on reduced interest repayments. Secondly – it tidies up your finances and enables you to focus on reducing the one debt rather than staying on top of multiple liabilities.
Certain banks are better to deal with than others when it comes debt consolidation. For instance – some banks will let mortgage brokers arrange a free valuation on your home (an “upfront valuation”) before submitting a loan application. This means that we know exactly how much your property is worth and how much you can borrow against your home before committing to an application.
If you’re looking to consolidate debt we will
- Calculate the amount the bank will loan you to consolidate your liabilities
- Advise on the types of debts that you can refinance into your mortgage. This includes credit cards, personal loans, car loans and store cards.
- Discuss the best loan structure your new mortgage
- Negotiate a competitive interest rate so you can aim to pay off your home loan as quickly as possible
- Discuss your options when it comes to variable and fixed interest rates as well as the different loan features that are currently available
How does a refinance work?
The first thing we’ll do is assess your current situation and find out why you’re looking to refinance. We will listen to your needs and requirements and then assess your eligibility for a refinance.
We will then present you with some lender and product options. Being a mortgage broker means that we have access to a large scope of Australian lenders – so we’re confident that we’ll be able to find you the right loan for your situation.
Refinancing a home loan usually incurs some fees – they include your current lenders discharge fee, state Government fees and the new lenders application fee (if applicable). Usually these fees are added on top of your new home loan. Sometimes we can negotiate with the new lender to cover these costs on your behalf.
We will be clear on the costs involved and will carefully weigh up whether a refinance to another lender is going to be financially beneficial for you.
We will then apply for your home loan. We will ask you for some supporting documentation such as identification, payslips, bank statements, etc. Once your loan is submitted and approved – we will work closely with your current lender and new lender to ensure that the switch over is easy and hassle free. A refinance to a new lender typically takes 4-6 weeks to settle.
We have access to hundreds of loans from all of Australia’s leading lenders. With so many options available we’re sure to have the right home loan for you.