First, you need to figure out if refinancing is right for you. There are lots of potential perks, but it may not always be in your best interest to refinance your mortgage.
Before you start the process, you need to think about your long-term financial goals. Ask yourself, what do you hope to gain from refinancing?
You also need to consider timing. What’s happening in the market? How long do you plan to stay in your current home? Is your earning capacity likely to change in the future?
It’s a good idea to sit down with a mortgage broker and have a chat about your situation to see whether refinancing is going to work for you.
Review Your Finances
Let’s say you’re in a position where you’ll likely benefit from refinancing your mortgage. Next, you’ll need to take a look at your finances.
When you applied for your existing home loan, you demonstrated your capacity to pay it back. You’ll need to do the same when you refinance by getting approval from your lender to take on the new loan.
Your lender will ask a range of questions, including –
• How is your credit score?
• How much equity is in your home?
• How much do you have in savings?
• Can you cover refinancing costs?
If you want to switch home loans, you first need to make sure you’re in a strong financial position to ensure you’ll receive approval.
Weigh Up Your Loan Options
Now you can start to compare home loans and find what’s going to work best for you. You could do your own research online, talk to your existing lender or reach out to a mortgage broker.
There are a lot of home loan offers out there and it’s important to consider all your options. While your bank may have a selection of loan products available, a broker can review all of the potential offers on the market to help you get the best possible deal.
But it’s not just about taking advantage of promotions and incentives. You need to find a home loan that fits in with your goals and offers the right features and benefits for your situation.
Doing your own research may only get you so far. By having a chat with a mortgage broker, you’ll know exactly which loan options are viable for you.