5 Reasons why you should consider refinancing your home

By the resi financial blog team, 30 October 2014

5 reasons to refinance

People look to refinance their home loans for many reasons:

  • To save money
  • To get a better deal
  • To get more flexibility
  • To raise some extra capital

If your personal circumstances have changed since you first took out your home loan, you should consider refinancing your loan.

Here are 5 reasons why you might want to consider refinancing your home:

1.        You’ve had a major change in your financial situation

Changes happen in life, that’s inevitable. Many of life’s big changes; children, marriage, death, redundancy or ill health, can directly impact on your financial situation. If something has happened in your life, which means you can no longer meet your monthly repayments; you need to consider changing to a home loan that requires smaller payments.

2.        You need money for home improvements

If you’ve decided that it’s finally time to get your dream kitchen fitted, that new bathroom or the extension on the back the house built – then you might need to refinance your home to raise some extra finance. Using the equity in your home can be a great way to raise some extra money. Equity is the difference between the valuation of your home and the amount you owe on your home loan.

3.             You want to buy an investment property

Many Australians refinance their current home to reinvest in another property. The advantages of investing in property include:

·         It is a relatively stable market

·         The investment is something physical that you can control (e.g. you can decide how much you spend on renovating the property)

·         The investment can grow in value over time

·         It’s an option that is accessible for many people

If you are interested in buying an investment property and need some extra capital to fund your investment, you could refinance your home loan.

 

4.   Your home loan is no longer competitive in the market  

When you originally took out your home loan, you probably spent time researching into home loans deals, looking for a range of features that suited your needs at the time at an acceptable rate. However, the home loan market is very competitive and it is a good idea to review your existing home loan against current deals, rates of interest and features to make sure you existing home loan is still competitive.

Look to review your home loan annually. If you find that your home loan doesn’t match up to current deals, then you may need to speak to your current provider to see if they can offer you a better deal. Alternatively, look around and speak to other lenders.

 

5.        You want to consolidate debts

Debt consolidation refers to the combination of several debts, such as a personal loan and credit card debt, into one low-rate loan. By refinancing your home loan you can raise the finance to pay off all your other existing debts. 

One of the main benefits of this is that you only have one set of paperwork and one repayment to make every month. In addition, interest rates on home loans are typically lower than on other types of credit – so you can help to reduce the total amount you owe each month.

 

If any of these reasons apply to your current personal situation, it’s time to consider refinancing your home loan. Speak to one of the experts at Resi today to find out more information about refinancing

Categories: refinancing, Refinancing home loan