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Top five reasons to look at mortgage refinance
May 10, 2011
Thinking of trading in your home loan for a newer model? Here are the main reasons people start searching for better home loans:
To save money
The main reason people explore other options on their current mortgage is to save money on interest. The aim of the game with refinancing is to maintain your repayments at their current rate but with a cheaper interest rate, so you can start making a dent in the principle and therefore reduce the lifespan of your loan.
Extra features
Many people find that their current home loan doesn’t offer adequate features such as redraw and line of credit. Having these extra banking features attached to your home loan means that, if things change, you have access to funds to boost your cashflow.
Finance renovations or investment
You may wish to refinance for a higher amount than your current home loan and use the extra money to invest in property or stocks, pay for your child’s education or to renovate your current home to increase its value.
Consolidate debt
Many people find greater peace of mind, not to mention reduced interest payments, in rolling all their outstanding debts into one. When credit cards, the mortgage and personal loans are all combined, repayments are easier to manage.
Changing times
Your circumstances may have altered since you first took out your mortgage. What might have been the best home loan at the time might not be working to your best advantage now – particularly if your mortgage was negotiated before the mortgage industry exploded with highly competitive products.
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