{"id":7543,"date":"2019-09-13T08:40:52","date_gmt":"2019-09-13T08:40:52","guid":{"rendered":"http:\/\/sage.decibeldevelopment.com\/?p=7543"},"modified":"2019-09-13T08:40:54","modified_gmt":"2019-09-13T08:40:54","slug":"5-ways-refinancing-your-home-loan-can-help-you","status":"publish","type":"post","link":"http:\/\/sage-builders.local\/5-ways-refinancing-your-home-loan-can-help-you\/","title":{"rendered":"5 Ways Refinancing Your Home Loan Can Help You"},"content":{"rendered":"\n

We take a look at 5 ways refinancing your home loan could help you:<\/strong><\/p>\n\n\n\n

1. Your lender’s rate is no longer competitive<\/strong><\/p>\n\n\n\n

We’ll\n start with the popular one first. One of the main reasons people choose\n to refinance their loan is to get a lower interest rate, and put more \nmoney back into their pockets instead of paying the banks.<\/p>\n\n\n\n

When done correctly, refinancing your home loan could save you thousands over the life of your loan, and free up cash now.<\/p>\n\n\n\n

2. You could switch between variable & fixed rates<\/strong><\/p>\n\n\n\n

Another\n popular reason to refinance your home loan is to switch between a \nvariable rate and a fixed rate. With a fixed rate, some want peace of \nmind. That is, knowing exactly how much their monthly repayments will be\n without the possibility of it changing for a set period is worth a \nslight increase in rate.<\/p>\n\n\n\n

Conversely, you may decide you’d like to \ntake advantage of a lower variable rate as you can accept the risk that \nrates may rise in future.<\/p>\n\n\n\n

3. You could be eligible for a home loan with better features<\/strong><\/p>\n\n\n\n

There\n are some great home loan features around at the moment, and refinancing\n could offer you the opportunity to take advantage or more flexible \nfeatures. Some money saving features to look for are:<\/p>\n\n\n\n

Flexible repayments<\/strong>:\n You might want to switch to a home loan that allows you to make lump \nrepayments without fees or open up an offset account to reduce your \ninterest.<\/p>\n\n\n\n

Redraw: <\/strong>Allows you to withdraw extra payments if you need cash. Look for a loan offering free redraws.<\/p>\n\n\n\n

There\n are also some pretty cool boutique features, like getting a repayment \nholiday (a break from repayments), or the loan portability which allows \nyou to take your home loan with you when you move without much hassle.<\/p>\n\n\n\n

4. You could consolidate your debt<\/strong><\/p>\n\n\n\n

Many\n of us have multiple debts like car or credit card along with our home \nloan. Often our car and credit card loans have pretty high interest \nrates, meaning more out of your pocket.<\/p>\n\n\n\n

Refinancing could give you\n the opportunity to merge your debts and potentially reduce the overall \ninterest you’re paying, streamlining all of higher interest debts into \none lower interest debt and reducing your monthly repayments.<\/p>\n\n\n\n

The \ninterest rate on a home loan is usually significantly lower than the \nother types of credit. Helping you to save on interest charges and pay \ndebt off sooner.<\/p>\n\n\n\n

5. You could release some equity in your current property<\/strong><\/p>\n\n\n\n

You\n may be thinking about joining the thousands of Australians that have \ninvested in property, renovating your home or traipsing around Europe on\n that trip of a lifetime. With your current home usually being your most\n valuable asset, it only makes sense to release as much of the value in \nyour home as possible.<\/p>\n\n\n\n

Home equity is the difference between your \nhome’s current value and the balance of your mortgage. For example, if \nyour home is worth $600,000 and you have a mortgage of $200,000 \nremaining, your home equity is $400,000. That’s money that can be used \nto build wealth.<\/p>\n\n\n\n

Not so long ago, the only way home owners could \naccess their home equity was to sell up and upgrade to another property.\n These days, home loans are flexible and it’s possible to get access to \nthe equity in your home without having to sell up. Reviewing your home \nloan can help you see exactly how much equity is available to you, and \nrefinancing can help you access the equity to use for other things.<\/p>\n\n\n\n

What should I consider before refinancing?<\/strong><\/p>\n\n\n\n

Cost of refinancing<\/strong><\/p>\n\n\n\n

While\n refinancing has some amazing benefits, there are costs associated with \nrefinancing your home loan – costs that may outweigh the potential \nbenefits. Following are two of the main costs associated with \nrefinancing:<\/p>\n\n\n\n

Exit Fees<\/strong><\/p>\n\n\n\n

Exit fees may apply \nwhen you pay out a loan early, usually in the first three to five years \nof your term. It could be a percentage of the remaining loan balance or \nit may be a set charge. Check your loan contract for more details. \nAlthough exit fees have been banned on new loans taken out after 1 July \n2011, they could still apply to loans taken out before this date.<\/p>\n\n\n\n

Borrowing costs<\/strong><\/p>\n\n\n\n

When\n you refinance, your new lender may charge a range of upfront fees. \nHowever not all lenders charge these fees and some may be negotiable.<\/p>\n\n\n\n

Case Study<\/strong><\/p>\n\n\n\n

Let’s have a look at a refinancing example using some numbers to better understand the benefits and costs.<\/p>\n\n\n\n

The situation:<\/strong><\/p>\n\n\n\n

Sue has a $300,000 loan repayable over 25 years. Her current rate is 6.4% and her monthly repayments are $2,006.<\/p>\n\n\n\n

If\n Sue can refinance to a loan with a rate of 5.9% a rate reduction of \n0.50%, she can lower her repayments to $1,914, a saving of $92 each \nmonth.<\/p>\n\n\n\n

The solution:<\/strong><\/p>\n\n\n\n

Looking at the cost \nside of things, we’ll assume Sue will pay $1,000 to refinance her loan. \nIn this case it would take about 11 months ($1,000 divided by $92) for \nSue to claw back the costs through the savings she makes.<\/p>\n\n\n\n

The outcome:<\/strong><\/p>\n\n\n\n

That’s not a bad time frame. If it was to take several years to recover her costs, refinancing may not be worthwhile.<\/p>\n\n\n\n

Should you refinance?<\/strong><\/p>\n\n\n\n

We’ve\n gone through the potential benefits of refinancing, the costs \nassociated and a short example. That’s a lot to take in. When it comes \ntime to make a decision about refinancing your home loan, the best \nsuggestion is to sit down with a mortgage broker you trust to help you \ngo through your options.<\/p>\n\n\n\n

\n\nArticle Source: http:\/\/EzineArticles.com\/9899507
<\/p>\n","protected":false},"excerpt":{"rendered":"

We take a look at 5 ways refinancing your home loan could help you: 1. Your lender’s rate is no […]<\/p>\n","protected":false},"author":1,"featured_media":7544,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"yoast_head":"\r\n5 Ways Refinancing Your Home Loan Can Help You - Sage Builders<\/title>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"http:\/\/sage-builders.local\/5-ways-refinancing-your-home-loan-can-help-you\/\" \/>\r\n<meta property=\"og:locale\" content=\"en_US\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:title\" content=\"5 Ways Refinancing Your Home Loan Can Help You - Sage Builders\" \/>\r\n<meta property=\"og:description\" content=\"We take a look at 5 ways refinancing your home loan could help you: 1. 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