What is refinance savings and how mortgage brokers can help
What is refinancing a mortgage? It is when you take out another loan to pay off an existing loan, and thereby reorganise where your debts are. This process can save you money and here is how. The reasons you should refinance are:
Obtain lower interest rates with your new loan, this way you pay less interest on your loan
Shorten the term of your mortgage by paying more per installments, which means that you are paying interest over a shorter time, thereby paying less total interest over the lifetime of the loan.
Option to switch between fixed-rate or variable-rate mortgages depending on what works for you.
Refinancing can help simplify your debt situation and get you better rates by combining any existing loans you have. For example, if you have 2 loans which are a car loan of $50,000 with an interest rate of 10% and a home loan of $400,000 with an interest rate of 4%. We can combine your car loan to the home loan which will result in a total loan of $450,000 but you will only need to pay the lower 4% home loan interest rate instead.
Refinancing can help you save money, but it is important to be aware of the details to avoid ending up with a worse deal. This is a mortgage brokers’ field of expertise; consulting them will help you dodge potential pitfalls and come out on the other side with a better deal. Some banks will even pay you to refinance your mortgages, yes that’s right you can get refinance rebates!
Mortgage brokers are essentially people who have a profession in finance who primarily finds their client a home loan that works for them and acts as the representatives of their clients to the banks. Mortgage brokers gain experience, usually from their time working at banks and mentorship from other mortgage brokers. They are able to expand your options and find loans available to you that you otherwise wouldn't have known about. An example of the benefits of having a mortgage broker is their professional relationship with banks and other money-lenders; they will be able to obtain better interest rates for you.
The key takeaways should be to look at refinancing and the benefits it has to offer for you but to also be diligent and mindful of the pitfalls of refinancing. Seek professional advice and come out on top. So what are you waiting for? There is money waiting to be saved!
Information Disclaimer:
Any advice provided is general and does not take into account individual objectives, financial situation and needs. All individuals should consider whether the advice is suitable for them and their personal circumstances.
