Are you a home owner who has recently undergone a life change? If you have recently married, had children, completed a home renovation or are looking to undergo a home renovation, or noticed that current interest rates are lower than they were when you took out your original mortgage, you may want to consider refinancing. Refinancing can help you increase your cash flow by giving you lower monthly mortgage payments. It can also help you free up money for an expensive home renovation.
Whether you are looking to refinance or buy your first home, one of the best ways you can save money is to compare home loans. Many people make the mistake of going to one bank, usually the bank they already have a relationship with, and investigating home loans through them. Just as you should comparison shop when making any large purchase, so too should you when looking to refinance or obtain a new home mortgage.
However, contacting different banks for the purpose of home loan comparison can be time consuming and sometimes confusing. If your time is at a premium, consider hiring a mortgage broker. Not only do mortgage brokers do the investigative work for you, they also want to find the best mortgage for your individual circumstances. Consider these benefits when hiring a mortgage broker:
Their service is free. Mortgage brokers are free to consumers. Their payment comes from the banks and is usually a small percentage of the loan amount.
No obligation to the mortgage broker. If you utilize a mortgage broker, there is no obligation. You are free to change your mind about refinancing or to not accept the loans that the mortgage broker presents.
Mortgage brokers are experienced. Nearly 35% of mortgages in Australia are secured by mortgage brokers. Their role in the mortgage industry is large, and they have experience working with a variety of clients in a variety of different financial situations.
Mortgage brokers can save you money. Since mortgage brokers have a wide range of loans with different terms at their disposal, they seek to save you the most money. If they save you, you are more likely to secure a loan through them, and then they earn a commission.
Refinancing your home loan is a process that can save you a significant amount of money compared to what you are currently paying on your home loan. Lower interest rates can reduce your monthly payment significantly, which can increase your monthly cash flow. To get the best deal when you are refinancing, consider hiring a mortgage broker to compare rates and help you obtain a mortgage with terms you find agreeable.
Just be sure not to buy more home than you can afford! Always aim to keep total housing costs under 33% of net income.