In 2022, banks are raising the interest rate, and housing price seems to be dropping a bit. But why do we say it is now a good time to consider refinancing?
The benefits of refinancing are not just limited to cash back and lower interest rate. Today we will have a closer look at other benefits of refinancing.
Loyalty Tax
The direct benefit you will get from refinancing, is to get cash back and lower interest rate. So you can save more money, and pay off your loans faster. Banks always give better deals to new clients instead of existing clients. So make sure you are not paying your loyalty tax.
Access Equity From Refinancing
You may also access equity from refinancing. As long as your property value increased, you can get a new mortgage of up to 80% of your property value via refinancing. And the extra funds can be used for further investment, or just simply put in the offset account for future use. But since the property value seems to be dropping, it will be a smart choice to do valuation sooner.
Especially if you are paying for high interest products like credit cards or personal loans, or if you are feeling some financial stress from your current mortgage repayments, refinancing will be a good option.
Refinance Back to Major Lender
If you had your mortgage with second tier lender, due to lending policy or credit score, then it might be a good time to review your mortgage and maybe refinance to a major lender.
Some big banks in the market can now do refinancing with no income documents required. And some credit repair companies may also help you to increase the success rate to refinance to a major lender, so you can save more money on the mortgage.
Grow Your Company
If you are self-employed, then refinancing can also help to grow your own business. Some major banks are now offering secured business loans for up to 100% LVR of residential property, with 80% residential loan and up to 20% business loan. Contact your mortgage brokers at MoreMore Finance to get more information.
What Else Should You Look for？
The Cost of Refinancing
It’s likely you’ll pay a discharge fee, whether you’re on a fixed or variable rate home loan. This fee is typically around $400. If you are on a fixed rate mortgage, you’ll need to pay break cost if you refinance before the end of your fixed term. But they may still be worth paying if the benefits of refinancing outweigh the fees.
The lender
While the product itself is important when you refinance your home loan, so too is the lender you’re switching to. Such as their customer service record, their branch and their online banking.
Questions about refinancing? Have a chat with Moremore Finance, and maximise your refinance benefits.
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