This can reduce the amount of interest you pay, and decrease the life of the loan. In turn, you can free up cash flow sooner and direct it elsewhere, such as saving and investing for the future.
One consideration is refinancing (or switching) if you find a more appropriate home loan.
Home loan refinancing occurs when a borrower repays their home loan with one lender (the previous lender) using the proceeds of a new home loan obtained from another (the new lender).
Here is a broad outline of the steps involved in the refinancing process:
- The borrower contacts the new lender and lodges an application with all required documentation.
- The new lender considers the documentation and assesses the application.
- The new lender conditionally approves the application and sends a letter of offer to the borrower.
- The new lender orders a property valuation. Read more…