Minimise bad debt by refinancing
Your house is the largest asset you may ever own, and your mortgage payment is most likely your largest monthly expense.
Wouldn’t it be great if you could use this asset to put extra cash in your pocket while, at the same time, reducing your monthly payments?
By refinancing your mortgage, you can take advantage of the equity in your home and turn this dream into reality.
Making the decision to refinance can be a difficult one, but it doesn’t have to be. Positive Financial Services has utilised many strategies that may help you improve your cashflow and pay down your mortgage faster and saving you thousands of dollars in interest repayments.
We can guide you through the entire process and help you achieve your financial goals much faster than you may have thought possible!
Five reasons to refinance
1. Take advantage of lower interest rates
- Why make repayments at a higher interest rate if you don’t have to?
- Your income may have increased, so your borrowing capacity or buying power may have improved.
2. Change the term of your loan
Refinancing and restructuring could also take years off your mortgage repayments and save you thousands of dollars in interest repayments.
3. Consolidate your debt(s)
Home Loan interest rates are generally lower than the interest rates charged on your credit cards or personal loans.
By consolidating all your debts with your home mortgage, you could save thousands of dollars in interest, fees and charges, while reducing the amount you pay each month in repayments.
This will improve your cashflow, which can then be put to better use!
4. Change your mortgage rate
You may want to change from a variable rate mortgage to a fixed rate mortgage. This will give you the security of knowing what the repayments will be for the fixed term period (normally up to five years) after which time we can renegotiate on your behalf for another fixed term period should you so wish.
5. Access cash from the built up equity in your home
Provide cash for a major purchase, home improvements, a dream vacation or sending your kids to university. Whatever the reason, by refinancing for an amount higher than your current principal balance, you can obtain the cash from the equity built up in your home.
The Positive Refinancing Process:
The decision to refinance depends on many factors, such as the amount of equity you’ve built up in your home, how long you plan on staying in your home, your current financial position, and the charges and fees you may have to pay for the refinancing.
Whatever your reason for refinancing, eliminate the hassle of shopping around—we can compare your current mortgage against hundreds of home loans to find the one that better serves your needs both now and in the future.
Positive Financial Services strongly suggests that you review your home loan(s) every 12 months to ensure that it is working for you in the best possible way and if it isn’t, then it has served its purpose and it’s time to refinance to another loan that will serve you better!
Note: Not following this advice can literally cost you thousands.
For more information on refinancing, or to book an obligation-free, complimentary financial health check with Positive Financial Services Director, George Nori, please click button below.
A. That depends on your circumstances.
When you take out a mortgage or home loan, you can choose between an interest rate that’s fixed, variable, or split (i.e. a combination of the two).
There’s no right or wrong option, because it all depends on your circumstances.
Fixed rate home loans
With the fixed rate home loan, the interest rate on your mortgage doesn’t change for an agreed period (usually one to five years) – no matter what happens to official interest rates.
Variable rate home loans
With a variable rate home loan, the interest rate on your mortgage can change in accordance to official interest rates. If these rates go down, so too does your interest rate. However, if the Reserve Bank increases interest rates, your home loan rate will probably rise, too.
Split rate home loans
A split rate mortgage combines features of fixed and variable rate options. For example, you can have 70% of your home loan at a fixed rate, while the remaining 30% is at an interest rate that varies with the market.
So which home loan interest rate option is best?
A fixed rate may allow you to sleep a little better at night, knowing that you a rate spike the following morning won’t affect your current repayments. But the disadvantage here is that a fixed rate lacks a degree of flexibility.
If official interest rates fall, a variable rate home loan can save you money, but you need to consider the risk that your mortgage payments could rise in the future.
If you’re contemplating a low introductory or honeymoon rate for an initial period you will save initially, you must find out what the rate will be when the ”honeymoon” period is over. The lowest initial interest rate doesn’t always mean the better deal.
The split rate home loan can give you the best of both worlds. Of course, the downsides are also offset to some extent because if the market rises or falls dramatically, it will be less of a “hit” to your mortgage repayments.
This is just a small snapshot of the big picture world of home loan interest rates. If you’re looking to invest, we encourage you to do your homework and partner with a mortgage broker with a proven track record of working in the best interests of his/her clients.
For an honest, obligation-free discussion about which home loan interest rate will work best with your lifestyle, get in touch with Positive Financial Services Director, George Nori – one of Australia’s most experienced and trusted mortgage brokers.