Heard about mortgage refinancing? In the past, most people who took out a mortgage painstakingly continued with it until they had paid it off. These days, people refinance their mortgage much more frequently. The average duration of a home loan in Australia now is just 4-5 years. Here we look at some of the reasons people in Australia refinance their home loan.
Renovation
If you carry out renovations, it often makes sense to refinance your mortgage and take out a construction loan so you only pay interest as building progresses. Once construction is over your loan then reverts to a principal and interest repayments. Many lenders offer construction loans, however, only a few of them do them well. The renovation process is a busy and stressful time for the home owner and having the construction loan progress smoothly helps to relieve some of that stress.
At Wyze Finance we can help you with your renovation by finding the right lender that offers the most suitable construction loan for you.
Lower interest rate
The most common reason for people to refinance their mortgage is to get a better deal. But be careful you don’t become interest rate-fixated. When you refinance your home loan, you need to consider fees and charges as well as the interest rate. You often must pay charges for exiting your current home loan, plus charges for taking out the new mortgage. You need to be sure that in refinancing your home loan that you’ll be better off in the long run after considering all costs.
Wyze Finance are the mortgage experts that can help you ensure the costs do not exceed any benefit of refinancing.
Greater flexibility
Many people only discover the full details about their mortgage when it’s too late. They try to do something and get told by their lender that either they can’t do it, or they will incur a hefty charge if they do. An example is switching a rate type – the ability to change your variable rate to a fixed rate. This feature is not possible with a basic home loan unless you pay a switching fee, so many people refinance their mortgage to give themselves this sort of increased flexibility.
At Wyze Finance we will find the product with all the features to suit your needs.
Home equity
Over recent years in the property market houses have appreciated at a significant rate. e.g. a home you bought for $600,000 five years ago, might now be worth $850,000. Refinancing your mortgage with a home equity loan might let you tap into that extra $250,000 equity.
You can use this equity for future investment, whether that is for the purchase of an investment property or investing in the share market. You may have another worthwhile purpose that the equity in your home can help you realise.
At Wyze Finance we can help you find the right lender for this type of product.
Having trouble making your repayments each month
Some people find they have borrowed more than they can comfortably repay, and they’re in danger of defaulting. There’s no shame in that. But don’t suffer in silence. If you’re having trouble making your repayments, talk to us at Wyze Finance about the possibility of refinancing your home loan to make it more manageable.
The absolute best time to refinance?
Whenever it makes financial sense to do so and the reasons above are just a few. Talk about mortgage refinancing with us at Wyze finance we can consider all possible options for you and your situation.