18th April, 2024

How to Refinance Your Home Loan for a Better Deal

Finance Tips
Home Loan Tips

Unlocking New Opportunities: Why and How to Refinance Your Home Loan

Refinancing your home loan can seem like navigating through a maze of rates and terms, but it’s often worth the journey. By replacing your existing mortgage with a new one, you typically aim for a better interest rate, lower monthly payments, or a different loan term. This strategic move can free up cash, consolidate debt, or accelerate your path to paying off your home sooner – as long as it is done the right way!

Definition and Benefits of Refinancing

Refinancing involves taking out a new mortgage to replace your current one. This switch can offer several advantages:

  • Reduced Interest Rates: Lock in a lower rate to decrease your monthly payments.
  • Debt Consolidation: Combine multiple debts into a single, manageable loan.
  • Equity Access: Free up cash from your home equity for renovations or other significant expenses.
  • Term Adjustments: Modify the length of your mortgage to fit your financial scenario better.

Current Interest Rates and Opportunities in 2024

In the wake of the rate shocks of 2022 and 2023, many homeowners are keenly observing interest rate trends. Most economists predict a softening of the cash rate towards the end of this year, although this adjustment might be postponed to early 2024 if inflation remains high. In light of these forecasts, Proptrack produced this simple graph that outlines the major fours outlook on when they expect the RBA to commence their rate-cutting cycle and by what degree – crystal balling of course!

Evaluating Your Current Home Loan

Before you leap into refinancing, assess your current mortgage. Consider these factors:

  • Interest Rate: How does your rate compare to the new rates available? Is there a significant benefit to you to refinance? Can you stay with your current lender if they improved their rate?
  • Fees: Are there early repayment penalties or high ongoing fees?
  • Loan Features: Does your loan include features like an offset account or redraw facility, and do you use them?
  • Repayment Flexibility: Are you able to make extra payments without penalties?
  • Internet banking: Given the lack of branches these days it is important to know what their digital solutions are like. Still, in 2024 there remain enormous differences between the banks and lenders in regard to their customer Internet banking solutions – you would be surprised to know.

The Refinancing Process Explained

Refinancing can be broken down into several straightforward steps:

  1. Goal Setting: Define what you hope to achieve with refinancing.
  2. Financial Review: Assess your financial health and creditworthiness with an experienced mortgage broker.
  3. Loan Shopping: get assistance to compare suitable loan products that meet your needs and not the banks.
  4. Application: Submit your application and required documentation with expert assistance from your helpful mortgage broker at every step.
  5. Settlement: Once approved, the new loan will pay off your existing mortgage.
  6. Post-settlement: This is an important one. A great mortgage broker, like the ones at Axton Finance, will keep in touch with you and automate the review process to ensure you are never ripped off by your new lender. It’s in our interests to ensure you remain on a great rate, not your banks.

Conducting Market Research

Understanding the broader market context is crucial. Research recent trends in home loan rates, consider economic forecasts and review mortgage brokers and lender reputations and reviews (at the time of publishing we have almost 300+ five-star Google reviews). This information will guide you in choosing the right loan product and lender.

How We Can Help

At Axton Finance we specialize in helping homeowners like you navigate the complex world of mortgage refinancing. Our team of experts will guide you through evaluating your current loan, choosing the best new loan, and handling all the paperwork. Let us help you secure the best deal possible and achieve your financial goals. Contact us today to get started!