Calculate the costs to Refinance a Mortgage or Home Loan – How to go about it
Like so many people over the last few years, you are shocked by just how low home loan interest rates have fallen to. Historically they would have been going back up by now in the usual interest rate cycle. It is not hard to work out that you may be able to substantially reduce your mortgage repayments by refinancing. The home loan calculator above is a very worthwhile tool to help you make an informed decision about whether to switch your mortgage to a new lender.
When you arranged your mortgage it seemed like a perfect home loan solution at the time. But now you see that your mortgage’s interest rate is completely out of sync with the low rates available in the market today.
Ok, so your current lenders mortgage package doesn’t fit any longer. You want to change and refinance to a mortgage that is going to reduce your loan repayments. Well this is not always or simple as it seems . Before you do anything it pays to get an up to date home valuation so you are starting the process from a position of knowledge.
Go here to get one : http://homevaluationguide.net.au/what-is-the-best-way-to-refinance-my-property/
Home Loan Calculator – How it works
Loan Calculator information required to best assess your mortgage :
- Amount of the Loan
- Annual Interest Rate
- Repayment Period
- The home loan calculator will then crunch the numbers and come up with the new repayments. It will show you :
- Monthly Repayments
- Total Repayments
- Total Interest Payable over the life of the loan.
When refinancing your mortgage or home loan makes sense
- Your lender’s interest rate does not keep up with the current market rates.
It won’t surprise you that the banks and building societies will not willingly contact you and tell you that the current mortgage package they have you on is not competitive any more. If you keep paying they will keep charging you the same amount. Even variable interest rates on existing home loans can be anything from .7 to 1 % different to what is available in the market. Calculate the costs of just what you could save and you may be surprised.
- There is a major change in your financial life :
Life rarely stays the same and circumstances change. There are many factors that can change your circumstances and require a review of your current home loan arrangements. These can be the loss of your job, a bad investment, having children , a death in the family, ill health etc. When you need to calculate the home loan and mortgage repayments under those circumstances it pays to take all the aspects into account.
- Switching to a fixed rate loan when the opportunity presents itself :
With interest rate at such low levels it is always a risk that they could rise. With 2 , 3 and 5 year fixed rate loans are also at very attractive levels not just variable mortgage rates. Having the certainty of a known monthly loan repayment is certainly appealing, particularly to people on a tight budget. The refinance calculator for home loans is not just designed for variable rate loans, but for fixed rate loans as well.
- You want to refinance to buy and investment property or undertake renovations.
One of the major attractions of such low interest rates is that it makes buying and selling property a more appealing option. Refinancing your mortgage to buy an investment property is a widely used and successful strategy.If you obtain a valuation of your existing property , it will allow you to understand your options better , go here:http://
homevaluationguide.net.au/ what-is-the-best-way-to- refinance-my-property/Using that valuation guide , go to the Home Loan Calculator and enter the data and it will help work out what the maximum amount of money is you can borrow. The information that the calculator provides will give you a good idea of the mortgage repayments after you take into account the refinancing of your existing mortgage.Renovating your property prior to selling or getting a revaluation is also apart of the investment property strategy and may be a way to add more value to your home that it costs to. Once revalued , your property is then ready to be used in a refinancing strategy to buy the investment property. A correct mortgage calculation method is very important as you don’t want to find your self stretched to this with repayments.
- You have large credit card or personal loan debts and want to consolidate
Refinancing credit card debts is a no brainer as they say. Home mortgage rates are much lower than unsecured loans like credit cards or personal loans so drawing more equity from your home to refinance and cancel the expensive debt is a very sensible process. It is not hard to calculate the savings as sometimes the interest rates differ by 10 % or more and the repayment difference is also huge. The results when you enter the information into the home loan calculator tool will probably shock you as the time to repay as well as the interest rates are huge savings.
When it doesn’t make sense to refinance your home loan or mortgage
- When there are high “bank break fee ” or penalties for quitting a home loan early.
- You don’t plan to continue owning the property for much longer
- Your credit rating has dipped since your previous loan due to outstanding debts, which has hampered your chances of getting a good, lower interest rate
- You have an uncertain income during the loan period, for instance working as a freelancer or casual.
- You have a low loan balance and you are currently not thinking of redrawing available equity
What are the Costs to Refinance a mortgage :
Before you decide to refinance a home loan or mortgage, you need to consider your circumstances very carefully over the coming 3 to 4 years. Using all the information available to you and calculate whether a lower interest rate, flexibility, debt consolidation or lower fees is more advantageous than the costs to refinance and also the time and stress involved in doing so. Merely chasing a lower interest rate is not always a sufficient reason to refinance a mortgage. It is important that you think about the whole of life of your loan, and not just the current interest rates. You also want to consider the cost of switching to another lender during the refinance process.
Home Valuation guide provides property reports to assist with valuations that can prove helpful in determining if you should consider looking at a refinance proposal. The website can also direct enquirers to finance brokers around Australia so help assist you with any enquiries for calculating home loans or mortgages in Adelaide, Brisbane, Canberra, Darwin, Geelong, Gold Coast, Newcastle, Hobart, Melbourne, Newcastle, Perth, Sydney or Townsville.