Setting up your home loan repayments to be automatically debited from your account is a great way to manage debt. You'll never be anxious about late payments, and you can see your debt gradually shrinking each month.
You could miss out on big savings if you're not regularly checking in on your home loan. Interest rates always fluctuate, and deals from lenders often could lower your rate. If it has been more than a year since last comparing rates, it's time to take another look and find out the best time to refinance your mortgage.
You’ve Found a More Competitive Interest Rate
When you refinance a mortgage, you essentially take out a new loan to pay off your old one. The interest rate for the new plan will be determined by several factors, including your credit score, the type of loan you choose, and the current market interest rates.
Some lenders may offer special deals to entice borrowers, such as cashback or waived fees. These deals should not be the main factor in your decision to refinance, but they can be considered when calculating how much you could save over the life of the loan.
Homeowners also look to refinance their mortgages to access the equity in their homes. You can use equity to improve, pay for education, or even consolidate other debts.
Equity Access
If you want to get access to additional funds, you may be able to use the equity in your home. You could do this by refinancing your loan and using the equity as collateral or by getting a line of credit loan, letting you borrow money up to a certain limit whenever you need it.
Usable Features
Different home loans offer different features that can be helpful to different borrowers. Some features, like an offset account or redraw facility, can help you save money on interest by enabling you to put more money towards paying off the loan.
However, these features often come with an additional price tag, so you should calculate the potential savings while considering the fees.
Debt Consolidation
Consolidating your debts means combining all of your outstanding debts into one loan. This can often get you a lower interest rate on a loan, saving you money in the long run. It can also simplify your finances by only having one monthly payment to make.
One Last Thing
You can refinance a home loan when you have equity when interest rates are lower or to get cash out of your home. And it’s not recommended to refinance your home loan in the first 12 months because of the multiple fees needed, such as discharge, property valuation fees, and more.
Some people may refinance their mortgage when they experience a major change in their life. This could be getting married, having children, or changing careers. For some people, these changes could mean their current mortgage no longer meets their needs. Refinancing their mortgage could help them get a better interest rate or terms that better suit their current situation.
Conclusion
Before proceeding, a home loan health check is a great way to ensure you get the best interest rate possible and take advantage of all the features your loan offers. You can also talk to brokers from Wealthy You, who can help finalise certain details for your refinance plans and offer various solutions that simplify the process. Get your mortgage approved today by filling out our secure contact form on our website!
