You might think there are plenty of reasons to refinance your home loan, but as a mortgage adviser I have learned that there are really just a few.
Many people that do refinance home loans may have personal reasons that they do not wish to discuss, or may be one of the more common reasons which I have listed below.
Reasons To Refinance Home Loans
Here are my five most common reasons that make people think about refinancing home loans;
- You are not happy with your existing bank – as mortgage advisers this is something we hear all the time. Banks have been cutting costs over recent years and one area is on staff which has seen a lot of good bank staff leaving and we are always hearing about poor service levels at both the bank branches and with the remote staff too.
- You want more favourable loan facilities – rather than having the bank dictate the loan terms, some loans give you as the borrower more control to adjust the loan terms or repayments to suit. This enables you to pay your loans off a lot quicker, and therefore can save you a lot of money.
- To borrow more – sometimes you will want to borrow more and when you approach your bank it all seems too hard. There are a lot of lenders that just cannot be bothered with small top-ups and this can be frustrating.
- You have been with a lender that you never wanted – sometimes in life we need to get finance and that might mean we just take what is offered. Often this might be with a non-bank lender as your situation meant you could not get bank finance at that time. But things have changed and you are now able to refinance to a bank.
- You may just want better rates – the banks are always changing the interest rates on home loans and sometimes one bank will run a special that seems more attractive.
There are many other reasons too, but these are five main reasons that I see where people think about refinancing their home loans.
The Biggest Problem With Refinancing
As explained, there are a few different reasons to refinance your home loan, and there are also reasons why it may not be a good idea.
I’ve noticed that people can often make a decision to switch banks in a hurry, and without giving it much thought.
It’s easy to get annoyed with your bank, so you walk into the bank next door and get “sold” on the new bank and how much better they are. But a few month later and you find that the new bank is no different.
It’s easy (and natural) to make a decision based on emotion; however you need to take a step back and look at the big picture and think about why you want to refinance and what you want to achieve over the long-term.
As a mortgage adviser I help a lot of people with making these decisions and encourage them to consider things in a logical way. I show people how the loans differ between the banks, so if they decide to refinance their mortgage then they are going to end up with the loan that offers the best options for them.
Get The Best Home Loan
Home loans are not all the same!
Too often people just look at the banks advertising and are focused on what rates the banks are offering thinking that’s what makes the best home loan – the lowest interest rates.
It seems to be the key focus of advertising for the banks, but there is a lot more to a loan than just the interest rate.
We spend hours researching and checking the various home loans to ensure that we can recommend the best home loan for you.
When I work with people I am able to explain what home loan suits their situation, and therefore help them decide if refinancing your home loan is the smartest things to do and then which home loan would be the best for them.
You should know why you should refinance home loans before taking the plunge and actually doing it because there is a cost for your solicitor; although I always try and get the new bank to offer a cash contribution to remove the financial impact for you.
Just make contact and we can have a discussion to start with.
