- September 8, 2021
- Posted by: Streamline Finance Services
- Category: Finance
There are many reasons that people regularly refinance their home loans; doing so could benefit you in many ways.
Saving Money: As mentioned, if you are paying a lower interest rate, you are effectively paying less interest over the life of the loan.
At the same time, this money that you’re saving could be used to help pay down the principal component of the loan, meaning that you will also pay off the outstanding debt faster. This is another reason it’s worth looking at a more competitive interest rate.
Access Equity: If you’ve owned a property for a reasonable length of time, it’s likely that the value of that property has increased. By refinancing, it’s possible to access some of that equity increase and put it towards other things.
Most people use the equity to put down a deposit on another property or even to renovate their current home. The ability to access equity is one of the most powerful tools at the disposal of property investors and a big reason why you should look to refinance.
Debt Consolidation: The great thing about home loans is they come with some of the lowest interest rates you can get, certainly in comparison to things like credit cards, personal loans or even car loans. When you refinance, it’s a great opportunity to roll any of those high-interest debts into one place and get a far lower interest rate. You are effectively paying out those other debts and using the equity in your current home to do it. In the long run, this saves you money, and it is money you can use to pay down your home loan.