.svg "page-1 (5)")
.svg)
.svg)
.svg)
.svg)
CLOSE
.svg)
Welcome back everyone. In the sixth and final part of my blog series, I want to discuss something that affects all of our financial journeys: Superannuation. Perhaps you’re concerned about your retirement savings? Or maybe uncertain about how to make the most .....
Refinancing - 5 min read
Are you dissatisfied with your current mortgage? If so, refinancing might be the solution. Obtaining a new mortgage to replace your existing one is called refinancing, and it can improve your financial situation in several ways.
Perhaps you’d like to replace your variable rate mortgage with a more stable fixed-rate loan. Or maybe you need to lower your monthly payments to create more room in your budget. Whatever the reason, refinancing could help.
Simply put, refinancing is the process of replacing your original home loan. It allows a borrower to improve their mortgage by changing the term or rate or both. During the refinance, the first loan is paid off, and a second loan is created.
Through this process, borrowers can reduce monthly payments, lower the interest rate, change lenders or even take cash out of the home. A cash-out refinance can provide the funding you need for home improvements, education costs or other large purchases.
Most homeowners refinance when they have equity in their home (equity is the difference between the worth of the house and the amount owed to the lender). If you’ve never refinanced a mortgage before, what kinds of issues do you need to worry about?
Before you decide to refinance, think about the following issues:
The first step to a successful refinance is to make sure you understand the current terms of your loan. It isn’t easy to shop around for better conditions before you know what you’ve got. The next step is to evaluate and compare home loan products to decide if you can find a better deal than your current loan.
We can help you to know if a refinance will help you to achieve your personal financial goals. Additionally, we can shop around for you, seeking a lending product that meets your specific needs.
The application process comes next. You’ll need to gather documents and schedule a time for an appraisal. Once approved, your new mortgage provider will contact your current lender and make arrangements for closing the loan. On settlement day, you cease paying the mortgage to your old provider and start remitting payments to the new lender.
As with other types of financial decisions, refinancing comes with some risks.
Not all homes increase in value, and if your home hasn’t, you may not have enough equity to justify the refinance.
A new home loan typically comes with dozens of pages of legal documents. If you don’t understand all of the terms, you might end up with a loan that doesn’t meet your needs. For instance, some loans include prepayment penalties, which could interfere with plans to pay off your mortgage early.
Whenever you consider making a big financial move, it’s helpful to step back and consider the big picture. What are your long-term goals? Will a refinance help you to achieve them?
If paying off your mortgage helps you to achieve your goals, a refinance may be in order, especially if your current loan has a high interest rate. On the other hand, the loan costs might negate the positive impact of a lower rate. In other words, you might be able to achieve your goals sooner by paying off your principal (if the loan allows prepayments).
An outside opinion can be incredibly helpful as you evaluate whether or not to refinance your home mortgage. By understanding the basics of refinancing, you can make a well-informed decision and take another step toward financial freedom.
Reach out to us at Altus to learn more about refinancing or to talk over your long-term plans with one of our expert advisers. We’re here to help!
Set your business on the right path with this simple guide.
Make sure you’re on the right track with this online checklist.
Refinancing - 5 min read
Wealth, Lending, Refinancing - 4 min read
Lending, Refinancing - 4 min read
© 2022 Altus Financial, All rights reserved.
Altus Wealth Pty Limited ABN 55 649 956 212 is an Authorised Representative of Altus Financial Services Pty Ltd ABN 24 637 026 825 an Australian Financial Services Licensee (AFSL no. 520266). Altus Financial Services Pty Ltd is not responsible for the advice, products and services provided by Altus Accounting. Julie Azzi is a credit representative (CR No. 366834) of BLSSA Pty Ltd ABN 69 117 651 760 (Australian Credit Licence 391237).
.svg)
.svg "page-1 (4)")