What is Refinancing and How does it works?
At North Brisbane Home Loans, we are always happy to answer any questions you may have, and one we hear often is “What is Refinancing and How does it works”? Put simply, refinancing is what we call replacing your old loan with a new one.
In this blog, North Brisbane Home Loans founder and mortgage broker Pat Cranshaw will help you understand the idea of refinancing a little better and offer some advice and expert tips.
What to Consider When it Comes to Home Loan Refinancing?
- Does it make sense?
- Will it improve the loan set-up in terms of the structure or rate and repayments?
- Will I be in a better situation afterwards than before?
The best and possibly most important thing to do is talk to your mortgage broker. They will take the time to assess your situation, discuss your short and long term goals and put the best plan in place to refinance and in turn help you get a better deal on your home loan.
Reasons to Refinance Home Loan
These are some of the reasons you might be looking at refinancing as an option for your loan situation:
To save time and money – Depending on each individual situation and circumstances, refinancing your property could save you money long term.
To get a better rate – If you’re looking for a better interest rate or if your current home loan is about to switch from fixed to variable.
To consolidate multiple debts – While not always ideal for everyone, some rates and deals can better suit those looking to pool their debts as one.
Ways to Achieve a Better Deal When Refinancing Home Loan
As a mortgage broker, Pat suggests home owners do the following to try and achieve a better refinancing deal:
- Keep current credit facilities in order.
- No late payments or over limits on credit cards.
- Continue to ensure home loan repayments are met on time.
- If there have been any extraordinary expenses coming out of transaction accounts – tell your broker, as when they assess statements for living expenses they will need to mitigate these.
- Be open to lenders you may not have heard of – as brokers can get access to many quality home loans with smaller lenders who provide better deals and service.
Benefits of Refinancing Your Home Loan
Every loan and personal situation is different, but if you choose to home loan refinance you could see these potential benefits:
- Reduced repayments
- Reduced loan term
- Lower interest rate
- Cash flow improvement
- Better structure for investment purposes
- Better structure to pay the loan down faster
- Access to equity for home improvements or other purposes
- Repay and close down more expensive debts
We hope that you’re no longer wondering “What is refinancing or how does refinancing a mortgage work ” and that we’ve helped you understand the possible benefits a little more. If you’re looking to refinance your home loan, get in touch with North Brisbane Home Loans today to discuss your individual situation. Phone us on 07 3889 9719 or enquire online here.
North Brisbane Home Loans is Brisbane’s leading mortgage brokers with more than 90 years’ combined experience.
We offer expert advice on a huge range of services including First Home Loans, Purchasing Your Next Home, Refinancing or Home Loans for Self-Employed. Contact us today on 07 3889 9719 or enquire online today!