When should you consider refinancing?
To refinance, or not to refinance? That is the question!
There are many good reasons to refinance, particularly when it can save you a substantial amount of money. Though, we do want to call attention to look past the interest rates – as they are not the only factor that determines overall saving.
So why refinance then?
- You may be unhappy with the product you have with your current lender, or unhappy with the lender themselves.
- You may be looking to renovate or extend your property, which usually requires some additional funds.
- You might want to consolidate debt such as personal loans and credit cards into one easy smaller monthly payment
- Or you might just want to look at your options for reducing your monthly repayments.
Are there any situations when you shouldn’t refinance.
Although usually are many benefits when it comes to refinancing, in some situations there may not be. These include possible fees associated with cancelling a loan and applying for a new one, plus the additional time it will take to gather the appropriate documents for your new application.
Are there any alternatives?
Of course there are! Before making a decision on whether or not to refinance, you can weigh up the options available to you if you decide to stay with your current lender. Your current lender may be able to offer you a lower rate than the one you’re currently on, and your broker may be able to assist with lowering or fixing the rate through your lender.
You may also have the option to extend the term of your loan, which will make monthly repayments lower. It may also possible to change to interest only payments for a short period of time if your situation has changed at work or home to ease some pressure in the short term.
What to look for
Take a trip back down memory lane to when you were in the market for your last property. Refinancing will be similar to this. Although you have the house locked in, you’ll need to dedicate the time to look for the right product for you, though this time you’ll have something to compare it to.
Don’t just be looking at the interest rate! Although important, refinancing comes with a range of other fees and costs that might outweigh that low interest rate. Look at comparison rates instead, as these will give you a better understanding of the overall saving.
Need a hand with it all?
We can help! All of our brokers specialise in residential refinance loans, and can help you navigate the waters where you may be feeling a little lost. If you want to get started, contact one of our experienced brokers in your area. Need to find one? Click here for our directory.