If you’re struggling under the weight of mounting debt and feeling the stress of multiple loans, a home loan refinance is a simple solution you should consider.
Debt is an unavoidable stage of your financial journey. Over the years, you are sure to take out a range of loans depending on your needs in life.
Whether you are buying a new home or upgrading your family car, chances are you will need some extra cash to finance your purchase. Managing one or two loans shouldn’t be a hassle; however, once you throw three or four credit cards and other personal loans into the mix, then you may encounter the difficulties associated with handling multiple debts.
If you find yourself surrounded by mounting debt, it may be time to consider consolidating your debts into one financial location. Refinancing can be a quick and simple way to gain greater control of your various debts, but there are few tricks to make sure you get the best deal.
First, consider the rate of interest you are paying for each of your loans. Credit cards and personal loans tend to carry a high interest rate and are not the most financially viable loans. So, what is the most cost-effective way to consolidate your debts through refinancing?
Equity is the key to a home loan refinance
If you have enough equity in your property, it may be possible to consolidate your higher interest debts into your home loan (which would have a lower interest rate). Rather than paying an interest rate as high as 14 per cent for a personal loan, your average home loan will carry an interest rate of less than 5 per cent for a $300,000 variable rate loan.
By consolidating your debt with a home loan refinance you may be able to save thousands of dollars that otherwise would be spent on excessive interest rates. You would also rid yourself of some of the stress of managing multiple monthly repayments.
If you are considering refinancing, then now may very well be the right time to do it. Record low interest rates and strong competition among the major lenders can only mean one thing: savings are there for the taking by clever borrowers.
As features and rates vary from product to product and from lender to lender, we are best suited to find you a home loan refinance product that reflects your personal circumstances and is right for you.