How the coronavirus pandemic triggered RBA slash in interest rates could be your chance to refinance your home loan.
Ever since it all began in February of this year the coronavirus outbreak has only been the bearer of bad news. From causing complete panic and mayhem, to actually affecting our daily lives and livelihoods, as well as the lives and livelihoods of the people we’re closest to.
But not all is gloomy. There is, in fact, one ray of light in all this darkness. And it is something that makes good financial sense.
Considering the outbreak and the impact to the populace, the Reserve Bank of Australia (RBA) has decided to lower the interest rates to a record 0.25%. And even your bank may be looking to reduce interest rates.
What does this mean for a homeowner like you? The answer is – This may be the perfect opportunity for you to refinance your home loan.
Refinancing can be effective. It is a sure way to get some extra cash for yourself that is in the ballpark of $300 - $600 every month for most people! It can also mean the difference between staying stressed and worried to easing that stress and worry by making cash available in these tough and chaotic times.
Now, as the sentiment turns from plain uncertainty to sheer panic, and people start looking for the smallest possibilities to grab any savings they can, while they can – you shouldn’t find yourself at the end of the line and a little too late.
This is why we’re putting out all the information you need to make an informed decision. Right here. Right now. And if you have any questions, we’re here to help you find all the answers too.
Am I eligible to refinance my home loan?
The answer is yes! The only conditions are – (1) that you qualify and (2) that you have a good credit rating.
It can all actually work in your favour and help with your cash flow situation at home. You might end up saving a good amount of money that is now available for investment, for paying off your debt faster or for any other purpose really.
I am new to this. How do I get a feel for what’s going on?
If you haven’t refinanced in years, you may find that a few things have changed. Digital systems can check and confirm your income and assets. You can manage your application online by scanning and uploading documents and by checking the progress and status. And, unlike what you may be used to, some appraisals can be virtual.
We recommend that you talk to a trusted mortgage broker who can walk you through the process and help you navigate the situation with ease and confidence.
Check if you have a fixed interest rate loan with your lender
Consider this - some lenders can lock in interest rates and you will be able to confirm this by going through the documents in detail. We recommend that you talk to a trusted adviser to assist with this crucial task.
An interest rate lock-in can have serious implications for your refinancing aspirations. With a lock-in as a term on your contract, your rate will stay the same even if the market rates change. The lock-in period may extend anywhere from one year or longer. On the plus side, there are cases where the break fee turns out to be $0!
Almost all big lenders are offering bonus cashbacks when you refinance your home loan with them. For example, you could earn a $4K cashback on a loan size of $250k and above, plus an additional $2k for every additional property refinanced.
With the market flush with offers, lenders are also providing fast-track approvals, which means you can refinance your home in a matter of 2-5 business days once your application has been received. Such offers might not last long once the market begins to pick-up.
Interested in refinancing? Here are the next steps with Wealthy You…
The threat of coronavirus is serious and immediate. We want to do our bit in bringing you relief through proper and meticulous service.
An opportunity to refinance can help you unburden that stress and worry and continue onwards with complete peace of mind.