Not sure what refinancing is all about? You are not alone. Our quick explainer lets you understand the basics and help you work out how much you could save.
Home loan refinancing is a hot topic.
Ever since interest rates hit an upward trajectory in May 2022, skyrocketing number of homeowners – as many as 28,000 each month – have turned their attention to refinancing.
However, plenty of Australians could be missing out on savings from refinancing simply because they are unsure of what is involved.
Research by Finder shows one in five people are in the dark about refinancing, while 63% admit to being only “slightly confident” in their knowledge about refinancing.
Let’s take a quick look at what refinancing is, and how it can reduce stress by potentially putting cash back in your pocket.
What does refinancing mean?
Refinancing simply means replacing your old mortgage with a new loan and lender.
The process is similar to the one you followed to apply for your current loan.
You decide the loan you would like to switch to, make a formal application, and provide evidence of income, expenses and your personal ID.
If the loan is approved, you can sit back and relax as the new lender arranged to pay out your old loan, When that is taken care of, you just start making repayments to the new lender.
Refinancing can be a surpassingly simple process. Better still, it can all happen very quickly, usually taking about four weeks from start to finish.
Refinancing can be a stress buster
Refinancing can be an opportunity to access home equity, enjoy better loan features, or consolidate several personal debts.
But the number one reason for refinancing is to save money by paying a lower loan interest rate. Those savings can help take the financial pressure off homeowners.
According to Finder, 60% of refinancers admitted to being stressed about their home loan before deciding to switch.
If that sounds like you, making the move to a new loan could be a valuable stress buster.
How much could you save by refinancing?
Potentially a lot! That is because lenders are still saving their best deals for new customers.
Is refinancing right for you?
If you are starting to feel the interest rate squeeze, give us a call to discuss your refinancing options.
We will help you work out if refinancing is the right step for you and how much you could save by switching to a new loan and lender.
Phone: 1300 855 022
Email: clientservices@zippyfinancial.com.au
Website: www.zippyfinancial.com.au
Louisa Sanghera is a Finance Broker for Residential Mortgages, Vehicle and Asset Finance, Commercial Lending and Budgeting and Cashflow Coaching with Zippy Financial.
She has gained more than 30 years in the Banking and Finance Industry, and since founding Zippy Financial, has become a multi award nominated expert in the field of finance featuring regularly in industry press and speaking at finance and investment seminars across the country.
Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.