If you are thinking about Home Loan Refinancing you should be sure of the benefit or benefits that you will achieve with Home Loan Refinancing before proceeding. To assist you in your decision of whether to refinance or not, here are 7 benefits that can be achieved from Refinancing a Home Loan.

7 Benefits associated with Home Loan Refinancing:

• Lower Repayment – Extra Cash in your Pocket
If you obtain a replacement homeloan with a lower interest rate and at least the same loan term you will improve your cashflow as your new homeloan repayment will be less than your current repayment. If you negotiate a new loan term longer than your existing loan term, this will also lower your repayment. By choosing an Interest Only Loan Repayment, this will also lower your monthly repayment as compared to that of a Principal & Interest Loan Repayment.

• Shorter Loan Term – Own your home sooner.
You can request a shorter loan term with larger repayments or retain the same loan term and make larger repayments and/or make more frequent repayments. This will enable you to be mortgage debt free in a shorter time and/or create equity in your property quicker. A Mortgage Reduction Plan can also effectively shorten the time it takes you to pay off your homeloan and significantly reduce the overall amount of mortgage interest that you will pay.
 
• Money for a Lifestyle Expense – Borrow More, Enjoy Now.
If you have equity in your property you may be able to increase your current homeloan giving you access to extra money to pay for a holiday, wedding, education expense, home improvement and/or purchase a motor vehicle. This is generally a cheaper option than accessing money via a higher interest rate credit card or personal loan.

• Money for Investment – Borrow More, Build Wealth.
Similar to the Lifestyle Expense Benefit but you are accessing money to be used for investment purposes i.e. purchasing shares or collectibles, depositing into managed funds or supplying a deposit for an investment property. Interest on the investment portion of the loan may be tax deductible and if so, this may result in a reduction in the overall amount of personal tax payable effectively increasing your cash flow.
 
• Lower Loan Costs, Financial Services Costs and Interest Rate – Economy of Scale
The larger the loan amount the more likelihood of receiving a lower interest rate along with extra Homeloan Package Benefits like No Loan Setup Fees, No Ongoing Fees, Discounts on Fixed Interest Rates and other Financial Services i.e. Bank Account Fees, Household Insurance, Credit Card Fees, Financial Planning & Investment Fees. When home loan refinancing this can be achieved by combining two or more homeloans into one larger homeloan or Loan Package and often at no cost or very minimal cost.
 
• Reduce your Total Monthly Debt Repayment – Consolidate Debt, Improve your Cashflow
By combining all debts i.e. Homeloan, Credit Cards, Store Cards, Personal Loans etc into a single homeloan facility when home loan refinancing, you will effectively reduce the higher interest rate of the short term debts to that of the homeloans lower interest rate . The resultant monthly homeloan repayment will be lower than the combined monthly repayments of the individual debts thus lowering your total monthly outgoings and leaving you with more cash in your pocket at the end of the month.

• Certainty in Managing Cashflow – Control of your Money, Peace of Mind
By converting a Variable Rate Homeloan to a Fixed Rate Homeloan you can protect yourself from the damaging effects of rising interest rates by locking in the interest rate for a set period of time, giving you certainty in managing your cashflow as well as peace of mind and more control of your money.

As you can see, the benefits to be had from Home Loan Refinancing are varied so it is very important to be clear on the benefit or benefits that you wish to achieve when Refinancing a Home Loan and how you can fully maximise those benefits. 

If you would like to discuss how you could maximise the benefits associated with Home Loan Refinancing, please contact myself or a Refinancing Campbelltown representative on (02) 46338700.

Refinancing Campbelltown – The Home Refinancing Experts