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Just because you've spent ages making sure you have the right Mortgage, it doesn't mean it will always be right for you. You need to contact your MFAA member regularly for a Home Loan Health Check to see if refinancing your Mortgage would suit you.
Over time, your personal and financial situation may change. You may get a pay rise, or decide on a sea-change. You might go from a safe corporate salary to the more uncertain income of the self-employed. You might want to start a family, or need to finance their education. As your needs and priorities change, you'll probably find the right Home Loan product for you will change, and you'll need to refinance your Mortgage.
In stable economic conditions, a variable interest rate might look more attractive, while in more volatile periods you could prefer the predictability of a fixed interest rate. Refinance your Home Loan to suit the economic times.
In the past, there was limited innovation in the Mortgage market. But now competition between Lenders is fierce and new products are constantly emerging that might suit your situation better. Your MFAA member can keep you up-to-date with new Home Loan products that might make it worthwhile to refinance your Mortgage. Talk to an MFAA member today.
Heard about Mortgage Refinancing? In the past, most people who took out a Mortgage doggedly continued with it until they had paid it off. These days, people refinance their Mortgage much more frequently. The average duration of a Home Loan in Australia now is just 4-5 years. Here we look at some of the reasons people in Australia refinance their Home Loan.
The most common reason for people to refinance their Mortgage is to get a better deal. But be careful you don't become interest rate-fixated. When you refinance your Home Loan, you need to consider fees and charges as well as the interest rate. You often have to pay charges for exiting your current home loan, plus charges for taking out the new mortgage. You need to be sure that in refinancing your Home Loan that you'll be better off in the long run after taking into account all costs.
Many people only discover the full details about their Mortgage when it's too late. They try to do something and get told by their Lender that either they can't do it, or they will incur a hefty charge if they do. An example is a Redraw Facility - the ability to pay extra money into a Mortgage and then redraw it later. This feature is not possible with a Basic Home Loan, so many people refinance their Mortgage to give themselves this sort of increased flexibility.
If you carry out renovations, it often makes sense to refinance your Mortgage and take out a construction loan so you only pay interest as building progresses. Once construction is over, it might make sense to refinance your Home Loan again so that you consolidate the total amount you owe into a loan that minimises your interest bill, while giving you a degree of liquidity.
Over recent years in the property market houses have appreciated at a significant rate. e.g. a home you bought for $300,000 five years ago, might now be worth $500,000. Refinancing your Mortgage with a Home Equity Loan might let you tap into that extra $200,000 equity.
Some people find they have borrowed more than they can comfortably repay, and they're in danger of defaulting. There's no shame in that. But don't suffer in silence. If you're having trouble making your Mortgage repayments, talk to your MFAA member about refinancing your Home Loan to make it more manageable.
To look at your Mortgage Refinancing options, talk to an MFAA member today.
Pay more, more often.
Want to pay off your Mortgage early? Then make bigger Mortgage Repayments, more frequently. You'll own your own home sooner and save a bundle on interest.
Most Mortgages are structured so that you pay off most of the interest in the early years. If you are serious about wanting to reduce the interest you pay on your Home Loan, you'll act now.
You're generally paying a higher interest rate on small loans (e.g. a car) and your credit cards so it makes sense to eliminate those debts first. So, put a rein on your credit card usage and then tackle your Mortgage.
When you entered the Mortgage market, you might not have been as well informed as you are now. Or the market might not have been as competitive. Stay in close contact with your MFAA member. They can let you know if there is a new Home Loan product that will save you money over the term of the Mortgage.
Most debt-retirement strategies depend on you being able to pay off more of your Mortgage sooner. Read the fine print or talk to your MFAA member to see if you have the flexibility you need to reduce your interest charges.
Assuming you have a Mortgage that lets you pay extra, you should pay more and pay often. The interest charged on a $300,000 Home Loan at a rate of 7.15% over 30 years with monthly repayments is over $420,000. By paying off an additional $50 a month, you'll reduce the interest bill by $39,000 and your loan term by 2 years and 4 months. You could look at making repayments weekly or fortnightly rather than monthly. Over 30 years the savings add up. To learn more, talk to an MFAA Member today.
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