You could always do with some extra cash to use as a buffer between pay checks. Is your home loan eating into your spare funds? Maybe you’ve heard from friends that refinancing your home is a good way to lower your home loan repayments, but how should you go about finding the best home refinance deal on the market?
To make it easier, we’ve pulled together these pointers as a guide.
- Set some realistic financial goals
Refinancing gives you the chance to review your long term financial goals. Whether you want to free up cash to cover new equipment, cash shortfalls due to unpaid invoices, or even to purchase a new work vehicle, it’s important to have a plan in place.
- Improve your borrowing power
Having trouble staying ahead of credit card repayments? Do your savings look less than impressive? Your first step towards improving your borrowing power is to reduce your outgoings and debts. Not many people realise that it is your actual credit card limit that determines how much you can borrow? So a simple change to your credit limits can be one of the simplest ways to increase your borrowing power.
Start by lowering the limits on your credit cards, paying your bills on time and keeping the amount that you owe on your credit cards as low as possible. Ensuring that your bookkeeping records up to date, preparing your loan applications in advance, and building your savings (to show a three- to six-month savings history) are other ways to demonstrate to lenders that you can be relied on to meet payments.Lenders will also want to know more about your credit history and your credit score. You can find out what your credit score is from a mortgage broker or a credit reporting agency like Veda.
- Find out your current equity
Australia has seen a significant rise in property values in recent years. For example, housing prices rose by 11.4% in Australia's eight major cities in 2015/16.
It is important to establish your home's current value in order to establish how much equity you have in your house. Equity is a powerful asset that can be used to buy your next home, invest in new work tools or pay for your school fees.- Shop around for good interest rates
Finding the best mortgage refinance deal for your needs sometimes requires some additional input. A mortgage broker can help you assess your current financial circumstances and objectives so that they can help you find the best deal to meet your needs. The mortgage brokers at Collins Home Loans, for example, will guide you through the loan selection process in three easy steps to find the best home refinance deal for you – and all for free. Why not contact one of our brokers today for their free advice and support?
