If you’re unhappy with your current home loan, you should consider refinancing. Or maybe your circumstances have changed, or you’re hoping to save more money, or you want to increase your flexibility.
Whatever the reason, it’s important to do your research and ensure that you’re making a smart financial decision. Here are answers to some commonly asked questions we get from our Wisebuy clients. They can help you determine whether refinancing is the right option for you.
Can I get a cheaper home loan than the one I have now?
It depends on what interest rate you’re currently paying, as well as the type of home loan you have. You might be eligible for a home loan with a lower interest rate and cheaper repayments.
There’s no harm in using our online calculator to see how much money you could be saving through refinancing.
You could also extend your loan term to make your repayments more affordable. However, it’s important to understand that you’ll pay more interest in the long run if you do that. But it’s better to do that than to lose your house if you’re having any financial difficulty.
Can I consolidate other debts when refinancing?
One of the main reasons people choose to refinance is the opportunity to consolidate their debts. This is because home loan interest rates are much lower than other forms of debt like credit card or personal loans.
If you have enough equity in your property, you may be able to refinance all your debts into a lower-rate home loan.
Are there any extra costs involved when switching mortgages?
While refinancing is a fairly simple process, it does involve some upfront costs. These costs can vary from person to person and will depend on your current home loan. It will also depend on whether you want to refinance with your existing lender or a different one.
Common costs include a mortgage application fee, property valuation fee, settlement fees and a discharge fee once you terminate your current mortgage. However, many lenders will be prepared to negotiate on fees, especially if you have a good credit history.
Will refinancing my home loan affect my credit rating?
Refinancing is seen as a credit application, so it does affect your credit rating. If you have a bad credit score, it will increase your chances of having your application rejected.
How long does the refinancing process take?
If you choose to fast-track your refinancing process, it may be completed within a few days. However, the standard process generally takes between two to four weeks. It will depend largely on the size of your property and your financial circumstances.
How we can help
Refinancing could save you money. It’s important that the benefits outweigh the costs and that you explore all your options.
Our experienced and licensed brokers at Wisebuy Investment Group can help you to make the right refinancing decision. We can also help you to negotiate with lenders. We do it for a living. We have a diverse range of clients in Newcastle, Lake Macquarie, Port Stephens, the Hunter Valley and the Central Coast.