For most of us, our home loan or investment loan is our biggest expense and right now, many of us are keeping a close eye on our expenses.
So, is it a good time to refinance?
The answer is a resounding yes if you haven’t reviewed your loan for a couple of years and if your income is stable, debt is manageable and credit history is good.
It can also be a great way to consolidate credit card and personal loan debt into one loan so you just make one monthly payment at a much lower interest rate.
It may not be a great time to refinance if your income has destabilised. But there are still options, so we need to talk.
The Pros of Refinancing
- Interest rates are low, which could mean you’d be saving hundreds of dollars every month.
- Opportunity to revisit what’s important to you in a home loan and whether you’d be better off with a basic loan with minimal features or a loan that may be slightly more expensive but with features like an offset account.
- Ability to consolidate debt and rather than pay high credit card, car finance or personal loan interest rates, you could roll it all into your low rate home loan.
- Depending on the term of the loan, it may further reduce your monthly payment if your loan term is longer.
The Cons of Refinancing
- If your financial position isn’t great at the moment, it may be hard to secure financing.
- You have to collate information and put together an application (most of which I do for you).
- You might need to pay a new loan application fee.
It’s worth having a conversation with me or your lender to see what we can do. At worst, we may be able to reduce your interest rate simply by ringing your lender and asking them to.
There’s nothing to lose and a whole lot to gain.
Give me a call or email me today to discuss your options.
