We Recommend To Refinance When…
If you are unaware, refinancing is when you replace and pay off your original loan with a new loan. The idea behind it is that the new loan will have better interest rates and therefore, lower repayments. We have outlined some scenarios on when you should consider refinancing. Keep in mind that most lenders will require you to have your mortgage for a minimum of 12 months before you can refinance.
A significant drop in interest rates
The interest rate associated with your loan contribute to your repayments. The lower the interest rates, the lower your repayments will be and the less you need to pay over the lifetime of your loan.
Lenders will often increase and decrease interest rates over time due to many different factors.
Increase of income
If you have had a significant growth with your income since you purchased your property, and can afford to pay extra off your mortgage; you may want to look at shortening your mortgage from 30-years to 20 or even 15 years. As you will be paying less in interest you could potentially save yourself thousands of dollars.
You have a build-up of debt
Over time, you may have a home loan, car loan, and credit card(s) to repay. Each loan will have its own interest rates fees, which can be quite costly. A way around this is by getting a loan equivalent to the total debt and using the new loan to pay off that debt. Doing this results in only having to pay one repayment every month/fortnight/week, one interest fee, and one-off payments.
