Navigating finances can be quite difficult, especially when it comes to managing the mortgages for your home. Considering how important this aspect is, you’ll want to make sure that you are doing everything right.
Now, we’ve already talked about what you need to do to prepare for mortgage refinancing. However, some of you may not be fully on board with the idea that you should be doing this in the first place. To help convince you to take the next step, we’ve prepared a list of reasons you should consider refinancing your home loan in 2021:
It Can Reduce Your Home Loan Repayments
If you’ve ever felt like you didn’t get the best terms on your loan, then refinancing might just be the best step to take. You have to understand mortgage interest rates because they are constantly changing, especially if a considerable amount of time has passed since you took out your loan.
In essence, this means that you may have access to better rates if you refinance your home loan, helping you save hundreds, if not thousands, of dollars every month. If you think that this is trivial and it’s not worth the trouble of refinancing, just consider the amount of money that you’ll save in the long run!
Your Property’s Value Has Increased
There’s a reason real estate is considered to be one of the best investment options. The value of a property is constantly shifting. In fact, property prices in Australia have increased over the past 5 to 7 years. But how does this affect your home loan?
Well, what you have to understand is that your property’s value is a major factor when it comes to determining what you pay. The reason for this is simple: if your home’s value increases, your home equity will also go up. This allows lenders to give you better deals on your home loan that will make paying for it infinitely easier.
The Fixed Rate Period on Your Loan Is Expiring
One important aspect that people often overlook about their home loans is the fixed-rate term. Fixed-rate terms last between 1 to 5 years, but when it is up, you will revert back to paying a variable rate. This rate is often more expensive as it doesn’t come with the discounts that you negotiated for. But a great way to get around this is to switch to another fixed rate or refinancing. If your fixed-rate term is almost up, then it’s a better time than ever to refinance your home loan.
You Can Afford to Pay More of Your Loan
Refinancing is also favourable if you’re looking to pay off your loan as fast as possible. If you can now afford to pay more than the rate that you initially got, you can refinance and increase your monthly payments so that you can pay off your loan quicker. While switching to higher rates may seem counterproductive, you also have to consider that your loan term will be significantly shortened if you opt to pay more in monthly payments.
Hopefully, this article has helped you see the benefits of refinancing your home loan. If you really look at things objectively, refinancing is the way to go in just about every situation. When you’ve taken a closer look at your situation, and it makes sense to refinance, it’s in your best interest to start the process immediately.
Are you considering mortgage refinancing in Perth? Work with FinanceCorp, a mortgage broker company that makes finance easier for every client. All the Finance Managers at FinanceCorp are qualified, trained, and experienced mortgage professionals who live and breathe finance. Get in touch with us today to get started!