When was the last time you reviewed your home loan? Refinancing or changing loans is often done to get a cheaper interest rate or a wider range of features. It could equate to significant savings and also allow you to pay off your home loan quicker. Best of all it is easier than you think.
Just chasing a lower interest rate won’t be enough. You need to think about the entire life of the loan, not just the headline interest rate. Also think about the costs of changing to another lender.
Refinancing your current home loans can be a difficult choice. Just because you see a better rate is available, it doesn’t necessarily mean you’ll end up saving money by switching. However, if you do it right, and at the right time, you could end up saving large sums!
It is also wise to consider the term of the loan, as this can significantly impact long-term financial obligations, as can whether a fixed or variable interest rate is selected. Another factor is the security of your income. You need to consider how secure your job is or if you can manage the home loan on one wage instead of two.
There can be many reasons to do rate and term refinance, a job change influencing your financial situation, a current lender’s loan rate that isn’t keeping pace with the competitors, change the type of loan or type of loan term.
Even if there isn’t any specific reason you have in mind, it’s always worth weighing up the viability of refinancing from time to time. Over the years loan products have improved: there might be a much better deal out there.
Also make sure when you refinance that you will be in a home you’d like to stay in for a fairly long period of time, moving house shortly after refinancing could mean you might not be able to take advantage of the cost savings.
There are some situations where refinancing should be avoided if possible. You shouldn’t refinance while chasing slightly lower rates.
These circumstances, chasing a small reduction in interest rates may prove a mistake, you can get what you pay for: going to a new lender for a small rate reduction may mean you are not looked after. If you miss an opportunity as a result of this, then this rate cut would have proved costly.
Also, consider how long into your loan you are. If you’ve been paying your loan for 20 years already, refinancing to a longer loan term will reduce your payments in the short term, but cost you many more Years and thus more money.
Refinancing is not for everyone. If the current rate on your loan is comparatively low, there is no benefit to be had from refinancing. In fact, you may end up incurring more costs when exit and other administration Fees are taken into account.
If the current balance of your loan is already low and you do not intend to redraw on the available equity, Then refinancing is usually not very beneficial.
It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan consultant.
To learn more about Rate and Term Refinance, please contact us at 1-855-901-8633 (Toll Free)
Our professional team of loan mortgage consultants are ready to assist you. They can help you navigate the loans you can choose from, calculate the benefit, and help you understand the features. They can also assist with making the application process straightforward and will keep you updated so you know what is happening.
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