Changing your mortgage means obtaining a new loan to replace your one. The new loan replaces the old one. You don't need to pay off the old one first to get a new loan.
Many homeowners refinance their mortgages to get a better interest rate. If you want to refinance your mortgage, you can get a new loan from any bank or lender.
Here are five reasons why you should refinance your mortgage:
1. Your Property's Value Increased
If your property's value has increased since you obtained your mortgage and the monthly payments on your new loan are lower than the current payments on your existing loan, you can refinance your mortgage to get a better interest rate.
2. You Can Get a Lower Interest Rate
Many lenders have lower interest rates on mortgages than your old lender. You could also get a lower rate by refinancing with a different lender. Lenders know that if you leave their company and go to a competitor, this could lower their business.
So, they will try to retain your business. They will compete with your current lender by offering you a lower interest rate. If you want to refinance to get a lower interest rate, you can transfer the loan to another lender.
3. Your Credit Score Improved
If your credit score is better now than when you obtained your mortgage, you may be able to get a lower interest rate or obtain a larger mortgage loan. You can receive a better interest rate by improving your credit score and providing a larger down payment to prove you are a serious buyer. Lenders are less likely to approve loans for borrowers with poor credit scores.
4. You Can Fund Your Home Renovation Project
If you plan to fund a home renovation project, you can refinance your mortgage to get a larger mortgage loan. You can use the funds to finance a renovation project. This can help you increase the value of your property.
You can also refinance your mortgage to finance a home improvement project. This can help you get the project done faster. It can also lower your monthly payments.
5. You Want to Consolidate Your Debts
You can place them on your mortgage loan if you have several debts. This lowers your monthly payments. It also gives you one single payment. Then, you can make one monthly payment each month to the lender. This should make it easier for you to make your monthly payments.
It may also make it easier for you to pay off your debt. You can do this by paying a portion of your debt each month for a set period. If you pay it off in full at the end of the period, you will save on interest, and you will not owe anything else to the lender.
There are many reasons why you should refinance your mortgage. Some homeowners refinance their mortgage when they want to lower their monthly payments. Others refinance to get a better interest rate, a lower interest rate, or reduce their current payment. A home renovation project, debt consolidation, or funding a home improvement project are other reasons people refinance their mortgages.
Wealthy You is an Australian Mortgage Company servicing Sydney for almost a decade, offering a variety of mortgage solutions to meet the specific financial needs of every client. As an alternative lending specialist, we can make refinancing your home simple. If you want to gain access to the best home loans in Sydney, get in touch with us! We look forward to meeting you.