There are other critical factors that come into play when thinking about a refinance of your loan such as;
• Different type of loan for flexibility
• Investment opportunities
• Financial Security
Let’s take a look at all of these refinance options in more detail shall we?
1. Refinance for Flexibility
Are you sure that your existing loan is working for you? Has it been some time since your loan settled and there have since been a range of new and exciting products that are now available to you? The answer is a refinance to a more flexible and cost effective loan product. With the advent of 100% Offset loans (available with most lenders in Australia) and significant advances with Lines of Credit just to name a couple, now could be a good time to consider a refinance away from that tired standard non-flexible loan product that’s costing you hard earned money! Do your research and sums and you may find a refinance to a more flexible product could save you thousands of dollars and more importantly, help you pay that loan off sooner.
2. Refinance for Investment Opportunities
Are you a seasoned investor or someone wanting to create an investment portfolio? Your current loan may be suitable for owning a home but does it really lend itself to you creating or enhancing a wealth strategy? A refinance to specific loan products that are tailored to meet the needs of investors will solve your problem. Products that allow you to dissect investment portions from personal or home debt, structure each individual loan account to your needs, maximise tax benefits, etc, are readily available on the market (in Australia) and will make life easier for you and your financial advisor or accountant. It is important to also remember that some of the costs associated with the refinance may also provide you with an additional tax benefit. Be a smart investor and refinance to the right loan for you.
3. Refinance for Financial Security
In today’s current volatile interest rate environment (in Australia), there is always the growing concern that with every rate rise, there is more chance that you may not be able to afford the repayments. There is a solution. A refinance to a fixed rate loan gives you the security of knowing that if the variable rate is rising, that your repayment will remain the same. For peace of mind and the comfort of knowing that you can meet your repayments regardless of rates increasing, then a refinance to a fixed rate loan is for you.
I guess the question you need to ask yourself is “Should I refinance my loan?” Based on what you have just read, then quite simply the answer is yes. Always do your research to establish what the best refinance option is for you. Remember, everyone’s needs are different, so you need to carefully consider your refinance options before contacting a refinance specialist.
Vicky Edema has been the Managing Director of Austral Mortgage Corporation since 1992, the company provides an easy to use loan calculator and offers various refinance options.