Refinancing and Debt Consolidation

Your life never stands still, and neither should your mortgage.

Your home loan might have been right for you when you took out your mortgage, but as your life changes, so do your lending requirements and it might be time to search for a more suitable product.

You may be able to refinance and find a loan that’s more appropriate for your needs, with more suitable features and a competitive interest rate to match.

There are now more alternatives than mainstream bank products available that may better suit your needs and personal situation.

If you feel that your loan is no longer right for you, speak with Your Home Loan Consultant to discuss your options.

Are your finances stressing you out and causing you to...

  • stay awake at night with anxiety?
  • have arguments over money almost daily?
  • constantly worry about your family and their future?



Switch lenders for a better home loan deal.

Imagine if you could eliminate your financial stress and...

  • Know you’re financially secure
  • Enjoy life without thinking about money every moment
  • Confidently be on track to a secure financial retirement

And enjoy that restaurant, that holiday, and other leisure activities you dream about!

The good news is, it’s all possible — even if you’re overwhelmed by debt right now. And having positive cash flow and financial security is easier than you think.

Why consider Refinancing and /or Consolidating your Debts?

Pay off your mortgage faster!

If you’re striving to be mortgage-free, there’s a good chance there may be a more appropriate home loan product to meet your needs.

Some mortgage products are designed to motivate borrowers to repay their mortgages quickly.

So now is the perfect time to talk to your mortgage broker and consider whether a new loan will see you on the road to financial freedom – fast!

Better interest rates and lower repayments

Rates and mortgage deals are constantly on the move.

To make the most of a competitive mortgage market, you might want to evaluate the loan product you currently have.

For example, you may want a lower variable-rate or lock into a fixed-rate.

Break costs can be expensive though, so you’ll need to check that you’ll come out ahead when all costs are considered.

Consolidate your debts

Consolidating your debts, such as credit cards or personal loans, into your home loan can save you thousands of dollars in interest charges.

Rolling your debts into one monthly or fortnightly repayment can also help make juggling your finances a little easier while improving your cash flow.

Avoid monthly fees and charges

Some lenders charge a monthly service fee – further adding to your debt.

Competition between lenders has increased and some now waive administration fees, so refinancing your home loan with another provider can be a smart move to help cut your mortgage costs.

Unlocking equity

Another benefit of refinancing your home loan is it gives you an opportunity to restructure you home loan, for future purposes and to access your equity.

As you pay off your mortgage you’ll accumulate equity in your home. You can then use your equity for other purposes such as purchasing an investment property.

As long as you are capable of meeting your loan repayments, refinancing your mortgage can help you tap into the equity that you’ve built up.

Three questions to ask before you refinance

But before you make the decision to refinance your home loan, there are a number of areas to consider. Here we cover off some questions you should ask before making the switch.

Will I be better off in the long run?

Refinancing your home loan to a lower interest rate can be a great way to lower monthly mortgage payments, freeing up some of your income for spending in other areas.
However, opting for lower repayments will usually mean signing up for a longer loan period and the longer you take to repay your home loan, the higher the accumulated interest payments will be.
Before refinancing, do some calculations to see how the new loan will stack up in the long run. If you find your total interest payments are higher under the new loan term, you might want to consider adjusting the amount you pay each month (if the mortgage terms allow) to help you to become mortgage-free sooner.

What are the costs of switching lenders?

Switching to a new lender can come with a number of associated costs, so it is important to ask your mortgage broker about these before making any changes. Some of the costs you need to be aware of include:

Bank fees. When you close your home loan account, you may be hit with a discharge fee (typically $100-$400) or break fees if you are ending a fixed rate loan before the end of the fixed term. Your new lender may charge fees for processing your new application, valuing your property and settlement.

Depending on the cost of each fee this could bring your total set up expenses to $300-$1000. If you are staying with your current lender but moving to a new product, you may also be charged a variation fee for this. Any lender fees accrued when refinancing will be added to your new loan, so to avoid paying interest on these over the life of your loan, you may want to consider paying off any costs when they are first charged.

Lenders Mortgage Insurance (LMI). For each new loan, a lender will look at the loan-to-value-ratio (LVR) to assess whether Lenders Mortgage Insurance is required. If you are borrowing more than 80% of the current value of the property, you will have to pay Lenders Mortgage Insurance again.

To avoid paying Lender Mortgage insurance, your mortgage broker may be able to arrange an upfront valuation of your property, so you will know whether you will be liable for Lenders Mortgage Insurance before proceeding with a refinance.


What are the loan features I will require?

Choosing a new home loan involves much more than finding the lowest interest rate. Home loans come with a range of features, which can provide flexibility and help you pay off your mortgage faster.

Depending on the lender and home loan type you choose, some of the features you might be able to access include an offset account, free redraw, unlimited extra repayments and direct salary crediting.

There are many things to consider before signing up for a new loan, so do your homework to ensure you are getting the best deal.

For more information contact Your Home Loan Consultant on 0401 388 153

Comparing lenders could save you thousands...

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The Story:

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Problem

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Solution

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