Are you thinking about Home Refinancing but not sure whether you should or not? Here are seven reasons that may assist you with your selection.

7 Benefits of Refinancing Home Loans:

• Reduce your Repayment-

If you obtain a new homeloan with a lower interest rate and at least the same term you will increase your cashflow as your new homeloan repayment will be less than your current monthly repayment. A new mortgage means a new term which may increase the time period to pay off your homeloan thus further reducing your monthly payment. If you choose a mortgage with an Interest Only repayment, this will also lower your monthly payment compared to that of a mortgage with a Principal & Interest repayment.

• Mortgage Fastrack -

You can shorten the length of your loan, effectively meaning that your mortgage will be paid down more quickly: You can request a shorter loan period, make bigger repayments and/or more frequent payments. This will assist you to be mortgage debt free in lesser years than usual or produce equity in your home quicker.

• Borrow additional money for a Lifestyle Outlay -

If you have accessible equity in your home you can access additional money in effect increasing the amount of your loan to pay for a holiday, wedding party, schooling expense, dwelling expansion and/or pay for a motor vehicle. This is probably a more affordable alternative than accessing money via a higher rate of interest credit card or personal loan.

• Borrow more money for an Investment purpose -

Similar to the Lifestyle Benefit but you are accessing equity in your property to be utilised for acquiring shares or collectibles, depositing into managed funds or supplying a deposit for an investment home. Interest on the investment portion of the loan may possibly be tax deductible.

• Lower Interest Charge and Lower Financial Services Costs -

By combining 2 or more Homeloans into 1, the larger the loan size the more chance of receiving a lesser rate of interest along with further Mortgage Package Benefits like No Loan Setup Fees, Discounts on Fixed Interest Rate Homeloans and other Financial Services i.e. Bank Account Fees, Home Insurance, Credit Card Charges, Financial Planning & Investment Charges.

• Increase your Cashflow (Consolidate Debts) -

By refinancing a home loan and combining all debts including Credit Cards, Store Cards, Personal Loans etc into a single mortgage you will pay a lesser rate on the extra borrowings as opposed to that of your Credit Card and/or Personal Loan. The monthly loan payment for the amount of debt consolidated will be lsser than the combined monthly payments of the separate debts thus reducing your complete monthly debt repayment and leaving you with extra cash in your wallet at the end of the month.

• Peace of Mind and Certainty of Cashflow -

By switching a Variable Rate Loan to a Fixed Rate Loan, you can lock in the interest rate for a period of time giving you safeguard against rising interest and/or surety of managing your cashflow, ultimately delivering you peace of mind and more control of your money.

As you can notice, there are various benefits to be had from Refinancing Home Loans and it is vital to understand how you can fully reap the benefits from Home Refinancing before trying to make a selection.