Refinancing your current home loan or home mortgage
With today's wide choice in competitive home loans, many home owners are tempted to refinance their home loans. Refinancing can prove to be a valuable option for home buyers but it can also have its traps. Here we look at some of the benefits as well as the risks, associated with refinancing.
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What are the benefits of home loan refinancing?
There may be several benefits to refinancing your home loan. For example, you may want to take advantage of a lower interest rate or you may want to borrow more money as the equity in your home increases. With the large range of home loans available today, you may just be looking to refinance your mortgage in order to get a home loan with features that your existing loan just doesn't have.
Refinancing your home loan to another mortgage with a lower interest rate could save you lots of money in reduced interest over the term of your home loan.
You may also want to change the type of home loan you have. For example, you may have a basic standard variable home loan that does not have any extra options such as a redraw facility, line of credit or direct salary crediting. Therefore, you may want to refinance your mortgage to a home loan that includes these options.
What to watch out for when refinancing
When considering refinancing your existing home loan, there are several issues you will need to consider.
If you are going to borrow more money, will you be able to comfortably meet the increased repayments, even if interest rates rise?
Will you have to pay any special exit fees if you pay out your existing home loan early?
If you are refinancing into a loan with a lower introductory honeymoon rate, will you better off when the honeymoon rate finishes and your home loan reverts to the normal standard variable rate?
Will you better off by switching to a home loan with a lower interest rate when you consider all fees and charges?
Australian mortgage refinancing options
If you are considering mortgage refinancing, you have many options available to you. If you are not seeking the help of a professional mortgage broker, then you should do your research. You can find out more about Australian mortgage refinancing options using this website.