Refinancing & debt consolidation
After you have had your home loan for a few years, it is a good idea to review it. Refinancing involves changing your home loan from one lender to another. It could be an opportunity to reduce the amount of interest you pay, to access the equity that has built up in your home or get access to money saving features that you don’t have with your current loan. Here is a quick guide to help you understand what you need to consider.
Decide what you want to achieve
Refinancing is usually done for a number of reasons. Start by working out what you want to achieve. This will help guide your research. Do you want to see if you can find a loan with a cheaper interest rate or with more flexibility and features than you currently have, or use it as a chance to increase your loan to give you the funds you need to payout other debts, replace your car, do some renovations or go on a holiday.
Find out what is available
Doing research will help you understand how the home loan market has changed since you took out your home loan. There is a wealth of information available online and it is a great opportunity to increase your understanding of home loans. Compare your home loan to what is currently available. Visit lender websites individually or check out comparison sites that list a number of home loans in the one place. It is also a good idea to speak to your current lender to see what they can offer.
How a mortgage broker helps
Doing all this groundwork is not something most of us do very often. This is where a mortgage broker can help. They take the time to explore what you want to achieve and then explain the options that are available to you. Once you understand all the details you are then in a great position to decide on the best option.
Finalise the details
The next step is to apply for the loan of your choice. This is where your mortgage broker can take care of it for you and keep you fully informed as to what is happing along the way. The lender will assess your application, get your property valued and determine if you can afford the new repayments on the loan. Once approved, the new loan contracts is then finalised, your old loan is paid out and the new loan begins.