Refinancing is a term that is used that simply means swapping your existing home loan to another home loan. You would only consider this if it was advantageous to your current situation. There are many variables that need to be considered. Some things that need to be considered if refinancing would be the interest rate, the term of the loan, and the reason for refinancing.
People do look at refinancing for quite a few different reasons. One may be to save money by lowering their interest rates, sometimes to access equity for home improvements, sometimes to consolidate debt, sometimes to invest and sometimes to simply help speed up your personal goals.
As always, there can also be some down sides to refinancing, such as costs involved with switching and having the time to deal with the paperwork. However, refinancing also has plenty of benefits.
Reasons that People Choose to Refinance
- Release equity for home improvements, investing or personal goals
- Lower interest rates that may save you money
- Specific product features that you don’t have on your existing product eg) offsets
- Cost reduction – cheaper fees
- Looking for better service
Below are some fees you need to consider so that you can weigh up what you are likely to save and what you are likely to spend when refinancing!