Refinance/Debt Consolidation
So Why refinance? …
Refinancing, it is done for a number of reasons, debt consolidation, lower interest rate, lower repayment, unhappy with existing lender, the list goes on.
Here are some examples of why you might refinance your loan:
*Saving money with a lower interest rate
All the lenders in the market are constantly competing against each other for your loan. That’s the main reason mortgage brokers exists. We gather all the key information from different lenders and provide you, the customer of the best deal offered by the lender that suites your situation. we are not restricted or influenced by any one lender so Synapse Finance Solutions can show you who’ll give you the best deals from a wide choice of lenders.
Some lenders will offer special deals from time to time and therefore there is a good chance that we can find a deal that will save you thousands on your loan. We can also show you how your interest rate will compares to other rates in the market.
*Accessing the equity in your home
More and more people are refinancing to access the equity in their property for purposes such as renovation, car purchase, going on a holiday or consolidating higher interest debts (such as car loans, personal loans, or credit cards) into lower rate home loan interest rate.
The key is if you have sufficient equity in your property.
Equity is the difference between what your property is worth and what you owe against the property.
For example Vanessa with the following situation
Home ($500,000) - Mortgage ($300,000) = Equity ($200,000)
Vanessa has $200,000 in equity and she may be able to refinance his loan to release an extra $50,000. If he has no immediate use for these funds, then with most lenders, he can simply place the funds straight back into the loan so that she pays no interest on the increased amount ($50,000) until she finds a use for it. So essentially she is virtually in the same position as when she started above i.e. she still has $200,000 in equity in her home. The only difference now is that $50,000 of her $200,000 is immediately accessible where as prior to the refinance all her equity was tied up in bricks and mortar.
Only when she finally decides to use the funds will she start paying interest on the amount she withdraws.
Vanessa may very well decide to leave her additional funds within her loan for now and continue, as she was prior to the refinance, paying her regular loan repayments based on her $300,000 loan. At any time in the future, say in 6 months time, she might decide to redraw $20,000 for a new kitchen, $10,000 to purchase a new car, and $5,000 to pay down her credit card debt. Only then would she begin to pay interest on the extra amount that she has redrawn.
*Debt consolidation
Provided you have enough equity in your home you may also be able to refinance your home loan to pay out higher interest rate debts you have. i.e. car loans, personal loans, or credit card debts. This may allow you to take advantage on the lower interest rates offered by home loans and could decrease your overall monthly repayments on all debts. why not shoot through a quick enquiry to determine whether your situation can allow debt consolidation because it could improve your monthly cash flow by as much as $1000, that’s an extra $12000 per year in your pocket and if the $12000 is put back towards the mortgage, you could knock off as much as 10 years off your loan! Now won’t we all love getting rid of the mortgage AS SOON AS POSSIBLE?!
*Access equity for investment
Always wanted to invest but not sure how to gather the initial funds to start it all? If you have the equity in your existing property, you could refinance to release to equity to invest in shares or property or anything you like. By accessing your equity in your home, it will also be the cheapest way to access the funds for your new investment. Why not enquire right now to see how much equity you can release in your current property and unleash your full potential!
