Refinancing your home can be a wise financial move in many situations. At Free Yourself From Debt Brisbane, we endeavour to help you repay debt through refinancing and debt consolidation
What is Mortgage Refinancing?
Why does it make financial sense to refinance your mortgage in Brisbane?
Basically, a mortgage refinance is when you take out a second mortgage to pay off your first. It sounds like this would have no benefit. But it can actually have very substantial benefits when performed by a competent company like Free Yourself From Debt. It can allow you to:
Access Home Loan Benefits
Banks often provide benefits for those starting out on a home loan. You can access all these starting-out benefits a second time on the same house when refinancing your mortgage. What’s more, banks often provide additional benefits for those refinancing their mortgage, so you can enjoy these benefits also.
Access The Equity In Your Home
Mortgage refinancing means repaying your home loan faster. And the more of your home loan that you repay, the more of your home’s equity that you access. Equity is the value of your home minus your remaining unpaid mortgage. So if your home is valued at $500,000, and you still have $250,000 of your home loan to repay, then you have $250,000 equity. Equity is a key facet of financial security and financial stability. Hence it is one of the key things that creditors look at when deciding whether to give you a loan.
Get A Better Interest Rate
Home loan refinancing provides a key opportunity to get a better (lower) interest rate than the one you are currently paying. This is one of the main reasons why people do mortgage refinancing. Mortgage refinancing can enable you to get a better loan through your current bank or another. Your current bank will probably want to keep its customer, so may lower its rate for you. But another bank will probably want to gain a customer, so may offer a lower rate than what you’re bank is offering. This is one of the key principles of how this process benefits you. They may also provide additional benefits.
When Is Mortgage Refinancing Beneficial And When Is It Not?
Mortgage refinancing can greatly reduce mortgage payments, but in other cases it can even be negative. When should you refinance?
In many situations, mortgage refinancing is a financially beneficial move, but in other cases it actually can be the opposite. Here are both cases, but note that Free Yourself From Debt is happy to talk to you about your personal situation themselves. You can call them on (02) 9011 7919. There are a number of things you should consider before refinancing:
When refinancing CAN make sense:
Your lender’s rate isn’t staying competitive with others in the market
A major change occurs in your financial situation
You are looking for more money to pay for home renovations, a child’s education costs, or invest in another property
Switching to a fixed rate at an opportune time
You’ve started to see large credit card debts and want to consolidate
When it might NOT make sense:
You might not own the property for much longer
Prepayment penalties are high on exiting home loan
Since your previous loan your credit history has taken a hit due to outstanding debts, making it less likely you’ll get a good rate
You’ve got an uncertain income over the period of the loan, such as work as a freelancer
Your loan balance is low and you’re not thinking of redrawing on available equity
Before refinancing, a borrower should consider their circumstances over the next three years. You should ask yourself whether flexibility, a lower rate, lower fees or debt consolidation is the goal.
Just chasing a lower interest rate won’t be enough. You need to think about the entire life of the loan, not just the headline interest rate. Also think about the costs of changing to another lender. Some of the most important things for borrowers to be aware of when considering refinancing include the impact of any fees that may be applied, such as entry, exit, application, valuation, stamp duty and legal fees, as well as any other ongoing charges.
Consolidating Your Debts With Mortgage Refinancing
You can use mortgage consolidate your debts in order to repay them faster
If you want to consolidate your debts and pay them off, Free Yourself From Debt can refinance your mortgage in order to do that. When you refinance your mortgage, you can add other debts to the refinanced loan in order to get discounted rates from your bank. The beauty of consolidated debt is that it combines your debts into one easy-to-manage, lower than the sum of existing debts amount. Banks lower your debt and/or interest rates to reward you for consolidating debt because they know that you are more likely to make your debt repayments and not file for bankruptcy when a respected company like Free Yourself From Debt is guiding you. We negotiate with your creditors to arrange the terms of your consolidated debt so that you get the best deal possible.
Benefits And Considerations In Consolidating My Debts
You could save thousands of dollars, but you need to commit to budgeting and on-time payments
There are a number of good reasons to consolidate your debts but you need to make sure you follow the budget set out for you by your debt counsellor. If you fail to follow your budget, it can undo the efforts you have put in to consolidating your debts. To clarify, the main and very major benefits of debt consolidation are:
Lower interest rates overall. In debt consolidation, the sum is less than the total.
Only one easy payment per month. If you’re sick of the hassle and stress of multiple bills coming in round the clock, all with different payment dates and penalties for forgetting payment, then you will enjoy the convenience of just one bill per month. You’ll probably never forget to miss a payment again!
But there is one key consideration in debt consolidation through mortgage refinancing that you have to be aware of; this will increase the size of your mortgage so you need to follow a budget and a payment plan consistently. If you consistently miss payments, you may actually end up paying more in the long-run through interest rates. Thankfully, Free Yourself From Debt is happy to help you make your budget in order to take the stress and uncertainty over financial planning and debt repayment.
Debt Negotiation With Lenders And Creditors
Getting you the best deal in mortgage refinancing
We at Free Yourself From Debt negotiate with your lenders and creditors on your behalf to get you the best deal on your debt possible. This includes the lowest interest repayments and the most benefits. Think about how useful it will be to save all this money through mortgage refinancing, money that you thought was gone forever. You can use this money to go towards paying off your other debts or as leverage when negotiating with creditors. Call Free Yourself From Debt today to find out more about our mortgage refinancing service and debt solutions on (02) 9011 7919.