- Posted 23 Oct
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As we’ve clearly learned in these tumultuous times, things can change at the drop of a hat! By playing it smart, you can easily take advantage of changes in the financial environment and use what may seem as a disadvantage, as strength and benefit to your situation, particularly when managing the investment in the Aussie dream, your own home.
What Is Refinancing?
Refinancing is the process of managing your debt in the course of the loan in order to manipulate certain circumstances to your benefit. Times when people refinance their loans are many and varied.
It may be for reasons of eliminating the burden of a long, drawn out loan or just working smart to pay it off slower under cheaper rates, thereby enjoying a higher standard of living during the course of the agreement. Refinancing is a good way to ensure you are always paying the best interest rate against your mortgage.
Why Do People Refinance Their Loans?
There are a few reasons why people will refinance their loans. There is a certain art to it that is best to learn sooner, rather than later, if you want to make money worries a thing of the past.
One reason you might refinance is when you have the potential to get a better interest rate or offer. Less interest means less on your monthly repayments and more money in your pocket, allowing you to still live a life while still maintaining the Aussie dream of owning your own home.
Consolidating Your Loans
A good reason to consolidate your loans into one is to ensure you receive the best offer. An example is having a car loan that you’re paying high interest on as well as a credit card with a similar interest rate; it makes good sense to consolidate these into a lower interest loan that will save you money in the long run.
Changing Types Of Loans
Often times, due to the economic climate, it may make good sense to manage the risk of your loans by changing from a variable rate loan to a fixed rate loan, thereby eliminating any potential problems which may come up should interest rates increase. Always speak to your financial advisor or a professional before making this move.
Freeing Up Cash
Other reasons people may choose to refinance can be as simple as freeing up cash by extending the length of your loan, or by reducing your payments. These could be due to situations which change in your life such as work or family commitments.
To take the guess work out of refinancing your investments, it’s always best to speak to an expert before going ahead; after all, it’s your money.
Our Home Loan Experts are standing by and ready to help with your First Home Buyer enquiries, contact us now or call 1300 735 557.