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Benefits of Mortgage Refinancing Homeowners Should Know

12/01/2022

Mortgage refinancing can be an excellent way for homeowners to save money. Homeowners can lower their monthly payments or interest rates by shopping around for the best rates and terms. Refinancing can also allow homeowners to tap into their home equity, which can be used for home improvements or other expenses.

There are a few things to remember before refinancing a home loan, such as the costs of refinancing and the length of time you plan to stay in your home. However, for many homeowners, the benefits of refinancing outweigh the costs.

No matter the reason for refinancing, it’s important to understand the process and what it entails before making any decisions. This guide will provide an overview of mortgage refinancing, including how it works, the benefits and risks involved and what to consider before moving forward.

What Is Mortgage Refinancing?

Mortgage refinancing is replacing an existing mortgage with a new one. There are many reasons homeowners might choose home loan refinancing, including obtaining a lower interest rate, shortening the loan term or accessing the equity in the home.

How Mortgage Refinancing Works

Home loan refinancing involves taking out a new loan to replace an existing one. The new loan will typically have different terms than the existing mortgage, such as a different interest rate, loan amount or loan period.

When refinancing a mortgage, homeowners can receive cash out of their home equity. This means they’ll borrow more than what is owed on the existing mortgage and receive the difference in cash. This cash can be used for any purpose, although it’s typically used to make home improvements, consolidate debt or pay for other significant expenses.

To refinance a mortgage, homeowners must go through the same process as they did when they originally obtained the loan. This includes applying for a new loan, going through a credit check and income verification and providing documentation of the home’s value.

Benefits of Mortgage Refinancing

Why does it make sense to refinance your home? Check out the following benefits: 

● Lower Interest Rates

Home loan refinancing can provide several benefits to homeowners. The most common reason for refinancing is to obtain a lower interest rate. This can save homeowners a significant amount of money over the life of the loan and lower their monthly payments.

● Shorten Loan Term

Home loan refinancing can also be used to shorten the loan term. This will result in higher monthly payments, but it will also save money on interest over time and help the loan to be paid off more quickly.

● Access to Equity

In some cases, refinancing can also provide access to the equity that has been built up in the home. This can be a valuable way to obtain cash for home improvements, debt consolidation, or other expenses.

Is It Worth Refinancing My Loan?

Sometimes you have second thoughts if it makes sense to avail of mortgage refinancing. Look at these considerations:

1. Interest Rates

When refinancing a home loan, compare the current interest rate with the current market rates. If rates have dropped significantly since you originally got your loan, it could be worth refinancing to get a lower rate and save on interest payments.

2. Fees

Some lenders may charge high origination fees or other closing costs, which could offset any savings you might get from a lower interest rate. 

It’s essential to compare offers from multiple lenders and calculate the total cost of refinancing before making a decision.

How to Refinance Your Home Loan

When you refinance your loan, you take out a new loan to pay off your existing loan. This can be done for several reasons, and whatever your reason for refinancing, there are a few things you need to know before you get started.

1. Shop Around and Compare Rates

You can talk to your current lender about refinancing, but they may not offer the best terms. It’s always a good idea to compare rates and terms from multiple lenders before deciding.

2. Have a Good Credit Score

You must make sure you qualify for the new home loan refinancing. This means having a good credit score and a stable income. You will also need to have equity in your home—this is the portion of your home’s value as opposed to what you owe on your mortgage.

3. Complete Paperwork

You will need to have all of your paperwork in order. This includes your current mortgage statement, proof of income and other financial documents. Your lender will use these to determine if you are a good candidate for refinancing and what terms they can offer you.

If you are thinking about refinancing home loan, take the time to learn more about the process and compare offers from multiple lenders. This can help you get the best terms possible and save you money in the long run.

Refinance with Investorfi

InvestorFi can help you navigate the refinancing process. Our experts offer the best loan options, the most viable advice and a lot of valuable information for your own benefit. As we work with many financial institutions, we can help you find the best deals out there. 

Contact us today to learn more.

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This is what we do.

We are finance strategists in the Mortgage Broking industry, helping Australians build wealth through property investment.

Our sole purpose is to reinvent ways to keep the Great Australian Dream Alive. Because we believe it’s everyone’s right to the security home ownership affords our families and community. Yes, our niche is Finance Strategy for Property Investors, but it is not what we do that makes us tick;
it’s

Because property investment is a decisive step toward financial freedom, we cultivate lasting relationships with our clients. We ain’t just a ‘whame bam, see ya later man’ kinda outfit. In fact, our business is built entirely from our lasting relationships with our clients who have suggested us to their inner circle – their family and friends. That is a pretty big tick of approval and a sure vote of confidence.

This is How we do

What separates us from the rest?

Have you ever considered the difference between Mortgage Brokers?

A Broker worth their salt has a playbook of ‘scenarios’. They are finance strategies that have worked in the past. He will offer up one, two or even three scenarios that he thinks will work best for you. 

But the great ones challenge the status quo, strategising new plays that serve your unique situation and financial goals. They will study, visualise, and fine-tune before offering only the best scenarios that build a rewarding property Portfolio.  

They never let good be the robber of the best and only play to win!

InvestorFi is a group of finance strategists that will design a unique scenario for your state of play towards your long-term game plan.

But don’t just take my word for it.

Clients like Tony F. said: I couldn’t be happier with the service. Wayne was excellent in guiding me through and delivering a great investment loan. Very responsive and savvy investment brokers. Will continue to use their services in the next purchase. 

And like Kim, Wayne is extremely dedicated, professional and a pleasure to work with. He worked tirelessly to help me secure an alternate lender before the settlement date and was extremely prompt and clear in his communications with me. 

And 

Robert wrote: Wayne is always very responsive and takes the time to lay out all the options in plain English.

Reviews like this make our souls sing. We’re in the business of helping people achieve real results that last!

So if you’re looking for a great Finance strategist like these incredible clients, you’re in the right place.

This is why we do

Gone are the days a single income could afford 2.5 kids, a pet, and a four-bedroom house in the burbs! 

At InvestorFi, our sole purpose is to reinvent the great ‘Australian Dream’. Because we believe it’s every citizen’s right to the security home ownership affords our families and community, not just for today but for generations to come.

But because it’s become so difficult, it requires complex solutions. One way is to seek finance strategy before purchasing a home. This way, you can leverage your full potential to live where you want to and invest where you can afford to. 

Property ownership has become a game of ‘finance strategy’, placing a premium on finance know-how. That is why we value education; our mantra is knowledge equals freedom, but knowledge shared is freedom multiplied.  

There is no drought; we have hit a new era with its epic challenges. Not everyone is up for the grind it takes to keep the dream alive. That’s why we also place a premium on camaraderie. We don’t see ourselves as a ‘hit and run’ service but as a hub and a way of life.