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A mortgage refinance is the process of taking out a new loan, and using the proceeds to pay off your old one. Generally, you'd do this to make a change in the structure of your debt in order to get more money, a lower monthly payment, or a shorter pay-off schedule.
Why refinance?
You'd trade-up your mortgage for the same reason that you'd trade-up your job, car, or living arrangement-because circumstances change. What you need out of a mortgage today may be different from what you needed five years ago.
There are many reasons why people refinance their home loans including:
- the option to roll all your debts into one.
- to take advantage of a cheaper interest rate or lower fees.
- to take advantage of other features offered by other products.
- to switch from a fixed to variable rate loan, or vice-versa.
- to access the equity in your home to use for renovations, holidays, other investments etc.
Getting ahead is easier than you may think. Adopt these simple principals and see the difference on your loan statements... |
Your home loan may be your largest financial commitment. Rising and falling of interest rates and your lender's competitiveness can impact on how much you pay back each month and how much interest you pay over the life of the loan. Refinancing could save you thousands of dollars, however there are some aspects you must consider before deciding to switch. |
