Refinancing / Debt Reconsolidation
- What type of things do people refinance for?
- How will refinancing benefit me?
- Should I refinance with interest rate rises?
- I have a lot of credit card debts and personal loans. What is the benefit of consolidating?
- Why should I refinance with a Home Loan Connexion broker and not my bank?
Home loan refinancing may be used for different reasons including:
- Renovating your home or other home improvements such as a pool.
- Paying off your debts such as credit cards by rolling them into your home loan.
- Obtaining a cheaper rate, even if it means giving up a few loan features.
- To raise cash for a purchase such as a car.
- You are paying a high interest rate – for example, if you arranged a low-start, rising-rate loan from your homebuilder.
- You want to switch from a variable rate to a fixed rate, perhaps because you can want to reduce the risk of higher repayments.
Refinancing can be a smart way to manage your money. Here are a few reasons why you may want to refinance:
- To get a peace of mind with a fixed rate.
- To obtain a lower interest rate so as to reduce your monthly payments.
- To gain the flexibility to pay off your loan faster.
- To consolidate credit cards, personal loans or other debts to reduce your interest rate and monthly repayments.
- To unlock the equity in your current property to finance a rennovation, purchase an investment property or free up some extra cash.
When the Reserve Bank raises interest rates, banks and other lenders usually follow suit by increasing your mortgage repayments. Refinancing your home loan from a variable to a fixed rate can provide certainty with your repayments.
By consolidating various smaller debts like credit cards or personal loans into one large debt, you may be able to reduce interest rates or lower your monthly repayments. Plus you only have one loan to keep track of.
When done properly, loan refinancing can save money and work very well. However, there are drawbacks involved – namely the cost. The reasons for refinancing should be legitimate and the cost benefits in the long run should definitely outweigh the short-term costs. At Home Loan Connexion we have no home loans of our own to sell, so you can be sure we will provide you with a number of options to suit your needs – not the needs of a lender