You and your home loan have had a pretty good run. It’s been with you through leaky roofs and loud neighbours. But maybe your eye has been wandering. You’ve seen other home loan rates and wondered how happy you really are.
After all, you know what they say: a change is as good as a holiday. Sure, a new home loan rate isn’t quite the south of France, but it could mean you get there sooner.
Refinancing your home loan can be a great way to save on your mortgage repayment. A lower rate can mean a lighter load on your monthly budget. Plus, home loan products may have changed since you first committed, so you might find a product with features that better suit you.
Sounds good, doesn’t it? Here’s what you need to do.
Cut back non-home loan debt
Your bank will want to see that you can comfortably meet the new repayments on your refinanced home loan. Aiming to cut back credit card debt or personal loan balances will free up income to help you manage the refinanced loan. Check out our Borrowing Power Calculator to see how repayments on other types of non-home loan debt can impact your likely loan size.
Know how much you can comfortably repay
In many cases, refinancing will mean taking on a larger loan, and your bank will want to be sure you can comfortably manage the repayments. Our Refinance Calculator can show you the likely repayments for a variety of loan sizes, rates and terms. Start with what makes you comfortable and you’ll get a better idea of how much you should apply to borrow.
Get your home ready for valuation
Your lender may want to have your home valued prior to refinancing your home loan. If this is the case, treat the valuation a bit like an open inspection. Put your best foot forward. Finish those repair jobs you’ve been ‘working on’. Give the place a fresh coat of paint and fill the garden beds with colour. The better the valuation, the more flexibility you’ll likely have when it comes to your loan.
Know why you want to refinance your home loan
Make sure you’re really clear about your motivation for refinancing your home loan. Many home owners use refinancing to fund renovations or the purchase of a new car, but whatever the reason, your bank will be keen to discuss whether refinancing your home loan is the best strategy for your needs.
In some cases, it may not be a suitable choice. For example, if you are refinancing to secure funds for business purposes, your lender could recommend a commercial loan. Or, you might find your bank would prefer you not use a mortgage to buy a wax model of Bradley Cooper.
Take the opportunity to explore new options
Home loan refinance options are plentiful. Refinancing your home loan is the ideal opportunity to take stock of your current loan, to see what’s available with other lenders and to weigh up different types of loans and their features. Circumstances change over the time and the loan you chose when you purchased your home may no longer be the best fit for your lifestyle.
Whatever the reason you’re looking at refinancing your home loan, there are choices available.. See how much you could be saving with our calculators or talk to us about finding the right option for you by calling 1300 86 143.
Your Choice Mortgage Brokers Pty Ltd ATF Halo Innovation Trust trading as Heart Mortgage Services - Australian Credit Licence 38643.
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