What Is Refinancing? An Overview of Mortgage Refinancing
Changing the terms of your existing loan using a new one is known as mortgage refinancing. You may apply for this financial option when you want to make your repayments more convenient for you.
Depending on your long term goals, refinancing can allow you to:
- Reduce interest rates: Qualifying for a better rate can save you thousands of dollars and possibly a lot more over the course of your loan.
- Lower monthly payments: If you are going through financial hardship, then refinancing can let you change your loan terms and adjust your payments.
- Switch to a fixed rate loan: Variable rate loans can be really stressful during volatile markets but refinancing can allow you to lock in a fixed rate.
- Pay off the loan faster: Whether you have recently gotten a promotion or switched to a higher paying job, you can shorten the length of your loan by refinancing.
- Consolidate other debts: When you refinance a mortgage, you also have the option to consolidate all your debt together into one easy to manage monthly payment.
- Free up cash for renovations: If you have equity in your home, you can be able to tap into those funds for a large purchase such as home renovations or even a vehicle.
Financial circumstances change.
Between high interest rates or employment hardship, homeowners may find it increasingly difficult to make regular payments on their mortgage. If you find yourself in this situation, mortgage refinancing offers a solution to help you cope.
The ability to secure a lower rate ultimately depends on a number of factors including credit history and employment. A lower rate can effectively save hundreds of dollars a year and a lot more over the course of the mortgage.
Another reason you may want to consider refinancing is to pull cash from the equity of your home. This can then be used to make large purchases such as home renovations, a new car or even to pay down debt. The amount you qualify for depends on the value of your home and how much the lender is willing to loan.
While refinancing offers numerous benefits, jumping into a refinance without preparation could actually be more costly in the long run depending on the new terms.
Important Mortgage Refinancing Considerations
If you plan to move out of your current home within the next few years, then refinancing your home may not be in your best interest. In fact, any potential savings would essentially be negated as there are costs and fees to process a mortgage refinance. You could actually end up paying more in the long run.
This is why homeowners are encouraged to first consider their long term goals before speaking with a mortgage broker in Perth or other areas. Lenders also look at the following when calculating the new rates you can qualify for:
- Credit score: The higher your score, the better rates you will be able to qualify for. It is strongly recommended to first review your credit report and fix any errors that could potentially harm your rate.
- Employment history: Lenders like to see that your income is stable before they can begin the mortgage application process.
- Financial obligations: If you have a lot of debt in addition to mortgage payments, then your lender may recommend consolidating everything together.
The rate you can get on a new home loan ultimately depends on these factors. However, taking the time to improve your score can drastically improve your chances of getting the rate you want.
Loan Monster Mortgage Refinancing
Refinancing applies to loans made for properties, vehicles or other major purchases. If you want to refinance your home loan and mortgage, you’ve come to the right place. Loan Monster specializes in providing financial solutions for properties.
Regardless of what you want to achieve, our wide range of services can help you reach your financial goals. Loan Monster provides detailed information available solutions and find the financial option that best suits your current circumstances.
Refinancing requires submission of application, appraisal of your property, and assessment of your credit file. If you need help with any of these processes, our company can provide assistance and advice, free of charge. We understand that the process to refinance a mortgage can be confusing which is why we are here to help.
We can help you achieve your goals in the fastest, easiest, and most efficient way possible. We are prepared to help you find the right refinancing for whatever type of property you are financing.
If you want to know more about mortgage refinancing, get in touch with us today. Send us an enquiry using the form on this page. It only takes a few minutes to fill out the form and we will respond to you within 24 hours, even on the weekends.