Should I Consider Refinancing my Home Loan?

Everyone wants to lower their mortgage repayments and pay off loans sooner, whether a homeowner or an investor. Refinancing is a great way of achieving this. Even if you secure a good deal with your mortgage, sticking with the same loan too long can be a mistake.

Whether the costs outweigh the benefits depends on the fees involved and your circumstances at the time. Mortgage Masters are the mortgage broker Auckland borrowers can count on for independent advice on refinancing home loans. Here are some top considerations from our team.

What is Refinancing?

Refinancing your mortgage involves securing a better interest rate or more favourable conditions for your home loan Auckland property. The property and mortgage market is dynamic, with new products, new features and shifting interest rates constantly changing the playing field.

Sometimes home loan requirements NZ borrowers once couldn’t meet are now within reach. Other times, you may end up with poor financing by mistake or due to circumstances out of your control and seek to remedy it with a new loan. No matter the circumstances, refinancing can be a good option if you’re stuck with a mortgage that isn’t the best deal compared to what’s available.

How Does Refinancing Work?

When you refinance, your new lender covers your old mortgage and replaces it with a new mortgage. The goal is to get an improved interest rate, shorter loan term or additional features like an offset account or a redraw facility. Lenders compete aggressively for your business so there are a variety of other rewards and incentives available, such as low-rate credit cards and fee free transaction accounts.

The best mortgage broker Auckland buyers prefer will assess the available options compared with your current mortgage and the associated costs of refinancing to ensure it’s worth it. You will have to pay application fees and since you’re essentially replacing your original loan with a new one, you must pay closing costs again.

Benefits of Refinancing an Investment Property

By consulting a mortgage broker Auckland property investors can save a significant amount of money by refinancing. For example, if you have a $500,000 mortgage and reduced the interest rate by just one percentage, you could potentially save $100,000 in interest repayments over 30 years which is enough for a deposit on another property.

In addition to securing better loan terms and extra features, refinancing your investment property allows you to access equity to renovate meaning you can increase capital growth as well as boost rental income with property improvements. You can also access equity for a deposit on an additional investment property. For these reasons, refinancing can be the ultimate tool for property investors interested in building up a larger portfolio.

Consult the Best Mortgage Broker Auckland Has to Offer

At Mortgage Masters, our independent advisors can help you access the best home loan Auckland property buyers can get, ensuring we look at the big picture and find the right mortgage for your unique situation and goals. To find out about home loan requirements NZ clients should get in touch today for a free consultation

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