Did your home loan has had a pretty good run? It’s been with you through memorable life events and loud neighbours. But maybe your eye has been wandering. You’ve seen other home loan rates and wondered how happy you are.
After all, you know what they say: a change is as good as a holiday. Sure, a new home loan rate is not quite the south of France, but it could mean you get there sooner.
Refinancing your home loan can be a great way to save on your mortgage repayment. A lower rate can mean a lighter load on your monthly budget. Plus, home loan products may have changed since you first committed, so you might find a product with features that better suit you. Sounds exciting, does not it? Here’s what you need to do.
Cut back non-home loan liabilities
Your bank will want to see that you can comfortably meet the new repayments on your refinanced home loan. Aiming to cut back credit card debt or personal loan balances will free up income to help you manage the refinanced loan. Request a free health check and get assessed on the repayments to see how much on other types of non-home loan debt can impact your likely loan size.
Know how much you can comfortably repay
In many cases, refinancing will mean taking on a larger loan, and your bank will want to be sure you can comfortably manage the repayments. A finance broker can show you the likely repayments for a variety of loan sizes, rates and terms. Start with what makes you comfortable and you’ll get a better idea of how much you should apply to borrow by using the equity on your property.
Get your home ready for valuation
Your lender may want to have your home valued before refinancing your home loan. If this is the case, treat the valuation a bit like an open inspection. Put your best foot forward. Finish those repair jobs you’ve been ‘working on’. Give the place a fresh coat of paint and fill the garden beds with colour. The better the valuation, the more flexibility you’ll likely have when it comes to your loan. A finance broker has access to get estimated valuations on your property and request upfront valuations with the preferred lender that you would like to refinance with which will give you less stress worrying about property valuations.
Know why you want to refinance your home loan
Make sure you’re clear about your motivation for refinancing your home loan. Many homeowners use refinancing to fund renovations or the purchase of a new car, whatever the reason, your finance broker or bank will be keen to discuss whether refinancing your home loan is the best strategy for your needs.
In some cases, it may not be a suitable choice. For example, if you are refinancing to secure funds for business purposes, your lender could recommend a commercial loan. Or, you might find your bank would prefer you not use a mortgage to buy a wax model of Bradley Cooper.
Take the opportunity to explore new options
The home loan refinances options are plentiful. Refinancing your home loan is the ideal opportunity to take stock of your current loan, to see what’s available with other lenders and to weigh up different types of loans and their features. Circumstances change over time and the loan you chose when you purchased your home may no longer be the best fit for your lifestyle.
Whatever the reason you’re looking at refinancing your home loan, there are choices available. See how much you could be saving with our refinance or let a mortgage broker find the right option for you. There are incentives to refinance with lenders such as cashback offers from $1,000 - $4,000 for eligible homeowners.
This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice. The original content was first published on ME Bank shared portal.