Refinancing
of Home Loans

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A refinance loan can provide you with the opportunity to take advantage of the equity in your home, potentially giving you greater financial flexibility, perhaps through paying off your mortgage early or consolidating other debts. At Multitude Broking, we will review your current home loan status in order to assess whether it meets your needs and if it represents the best possible deal for you.

When Did You Last Review Your Home Loan?

In a way, it can be easy to forget about your home loan. As long as you can make the monthly repayments, many of us are happy not to think about it too often.

But is your current home loan really meeting your needs? If you took out the loan some time ago, it may be that your family or financial circumstances have changed, and a loan that was once the best option might no longer be so.

Multitude Broking can undertake a review of your current home loan status to assess whether it is still providing you with the benefits and performance you need. We can also help you to examine any refinance options that might be available and which will better suit your circumstances today, or help you to achieve your investment goals.

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Can I Use The Equity In My Home?

The term equity refers to the difference between the amount a property is currently worth on the market, and the amount outstanding on the mortgage that is not yet paid off.

You can use the equity in your home to apply for an additional loan, with your property acting as security. Alternatively, you might be able to redraw any additional repayments you have made. The finance obtained through utilising home equity can be used for funding major expenditure, reducing the cost of other borrowing (e.g., credit cards, unsecured loans, etc.), everyday living expenses, or a combination of these.

If you have substantial equity in a property, a line of credit home loan may be an efficient way of refinancing. This enables you to access equity easily and quickly, much in the same way as you might with a bank account.

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If you are looking for ways in which to pay off your mortgage more quickly, a refinance loan could be the right option. By moving to a home loan with a lower rate, for instance, the amount you need to pay each month will be reduced; however, if you are able to keep making repayments at the current amount, you will be reducing the overall size of your loan more quickly. This could mean greater financial freedom and flexibility years earlier than you anticipated.

Debt consolidation is another way you can use the equity in your home and a refinancing loan. Through borrowing against your home at a lower interest rate than other forms of credit, and using these funds to pay off credit cards and other loans, you can effectively reduce your monthly outgoings. There is also the added convenience of only having to make one repayment a month, rather than a series of separate ones.

Multitude Broking can take you through the process of finding the right sort of refinance loan, and help to make the application process quicker and simpler. Speak to one of our specialist mortgage brokers to learn more.

Will This Help Me To Pay Off My Mortgage Quicker?

If you are looking for ways in which to pay off your mortgage more quickly, a refinance loan could be the right option. By moving to a home loan with a lower rate, for instance, the amount you need to pay each month will be reduced; however, if you are able to keep making repayments at the current amount, you will be reducing the overall size of your loan more quickly. This could mean greater financial freedom and flexibility years earlier than you anticipated.

Can I Use A Refinance Loan To Pay Off Other Debts?

Debt consolidation is another way you can use the equity in your home and a refinancing loan. Through borrowing against your home at a lower interest rate than other forms of credit, and using these funds to pay off credit cards and other loans, you can effectively reduce your monthly outgoings. There is also the added convenience of only having to make one repayment a month, rather than a series of separate ones.

How Can I Find Out More About A Refinance Loan?

Multitude Broking can take you through the process of finding the right sort of refinance loan, and help to make the application process quicker and simpler. Speak to one of our specialist mortgage brokers to learn more.

Frequently
Asked Questions

How much can I borrow?

This is naturally the first question that most people ask. To work this out, you need to weigh your outgoing expenses against your income. Try to total up how much you spend on rent, transport and running your car, for instance, as well as your regular outlay on groceries and utilities, plus how much you are currently repaying on credit cards and loans.

Once you have added these figures together, subtract them from your net weekly or monthly income. From here, you should have a rough guide as to how much you can repay each month on a home loan..

What is home loan pre-approval?

Pre-approval means that, based on the information you have provided, a lender has in theory approved your loan. This is important because it gives you a clear indication of how much you will be able to spend, and therefore helps you to better understand what sort of priced property you should be looking for.

Am I eligible for the First Home Owners Grant (FHOG)?

The First Home Owners Grant (FHOG) is an assistance scheme designed to help first home buyers to raise a deposit or to make the purchase price of a residential property more affordable.

The specific eligibility conditions and restrictions vary from state to state, with the key restrictions relating to the value of the home you are intending to purchase, and whether it applies to existing properties only, or new builds (including off-the-plan apartments) as well.

You can find out more about the FHOG here.

How much deposit do I need to get a first home loan?

The maximum amount that Australian financial institutions are currently prepared to lend is 95% of the value of a property (known as the loan to value ratio or LVR), as established by an independent property valuer. However, the amount of deposit required in order to be able to get a home loan will ultimately depend on the type of loan and the lender. For instance, with some loans banks will only lend a maximum of 80% of the LVR, meaning you need to come up with the remaining 20%.

Talk to us and we will be able to guide you through the different types of loans that are available and the requirements of different lenders.

Can I get a home loan if I’m self employed?

If you’re self employed, it’s likely that you’ll be limited to borrowing a maximum of 80% of the value of a property (LVR).

However, with our experience of the home loan industry, we know which lenders are the most accommodating when it comes to providing loans for people who are self-employed or run their own businesses, and can therefore give you a reliable guide as to how much you can expect to borrow.

What does redraw mean?

Some variable rate mortgages enable you to make additional repayments, with the option that you can draw down (i.e., withdraw) funds at a later date, should you need to. This option isn’t always available, however; it will depend on the lender as to whether this feature is offered.

What is an offset account?

An offset account is one that is linked to your mortgage account. Any funds in this account are offset against the outstanding mortgage, thereby reducing the amount of interest you are paying. This can be a useful tool for paying off your mortgage more quickly.

Are redraw and offset the same?

With a redraw facility on your mortgage, the additional funds you repay over and above the required repayments are paying down both the balance on your mortgage and reducing the interest paid. With an offset account, the funds in this account reduce the amount of interest you pay, but do not impact on how much of the principal is outstanding.

What is a fixed rate home loan?

A fixed rate home loan has a predetermined interest rate that remains in place for a set period of time, regardless of fluctuations in official interest rates. This means that for the entire fixed rate period, you know what your repayments will be.

What is a variable rate home loan?

A variable rate home loan means that your mortgage repayments will likely change when official Reserve Bank interest rates change. This means they can both increase and decrease.

What is an interest only home loan?

This sort of home loan is best suited to investors, or perhaps people who are in no hurry to pay off a mortgage. Repayments only cover the interest on the loan, not the principal, and so when the interest only period is up (which can be between one and five years), the repayments can increase in size quite significantly.

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