If you have a home loan and have heard about refinancing, this blog is for you. Refinancing can save you a lot of money, and you can learn about it in this blog. Learn this important information first before looking for a refinancing service in Wingham.
Let’s start with the basic. What is refinancing? Simply put, it is getting a new home loan from a different mortgage lender than your previous home loan. Of course, you only switch to a new mortgage lender when you get lower interest rates. And in 2023, many mortgage lenders lowered their interest rates which have seen a spike in homeowners refinancing their existing home loans.
The next question is how much money you can save by doing so and if there is a huge amount of paperwork involved. Let’s be honest; if the savings is not much, no one wants to go through the hassle of paperwork they did when they first got their home loan. So, let’s see these two points. As for how much you will save, it will depend on these factors:
- The amount left for you to pay back to the lender
- How much is the difference in the interest rate? For example, if you took it at 3.07% and the current rate is about 2.73%, you save .34% overall.
- What were the terms when you got the loan And lastly,
- The amount it will cost you to go for refinancing
Just make this calculation or let the mortgage broker you are talking to make this calculation for you. If you find the savings enormous, only go for refinancing.
As for the paperwork involved, it will be the same as your original home loan with some extra steps. But if the money saved is huge, this little paperwork won’t be a bother.
Now the question arises why the best time is now to do refinancing. Going by the market trends till the half of 2023, the housing market is on the positive side. This is due to the lowered interest rates, and Reserve Bank stated that the official cash rate is rising in 2024. Hence the banks will keep the interest rate lower for the time being. But going further into 2023, getting a refinancing may become tougher. Hence now is the best time to contact a good refinancing service in Wingham if you want to save money on your home loan.