Crest Lending – 4 Signs it May Be Time to Refinance

1.  You’ve been with the same lender forever

• Interest rates are at historic lows and competition between lenders is fierce. There are plenty of red-hot deals out there, so it’s important to shop around.

• If you’ve been with the same lender for years, chances are you’re probably missing out on a better deal elsewhere.

2 You have no idea what a redraw facility or offset account is

• Most home loans nowadays come with money-saving features like offset accounts and redraw facilities. These tools allow you to save in interest and potentially pay off your loan sooner.

• Offset Accounts

With this set-up, a transaction account is linked to your mortgage. Any money deposited is offset against your loan balance, reducing your interest payable.

Example: you owe the bank $400,000 and you have $50,000 in the offset account. Interest will only be calculated on $350,000.

• Redraw facility

With this loan feature, you can make extra repayments on your mortgage and potentially save on interest. On top of that, you can still access the funds in future should you need them.

3 Your personal circumstances have changed

• All of these elements need to be taken into consideration when choosing the right home loan for your needs.

4 You’re drowning in debt payments

• If you’re struggling to cover multiple debt repayments, debt consolidation could be the answer. This strategy involves refinancing your mortgage and using some of your equity to pay off your debt.

What are the benefits?

• Home loan interest rates are lower than other types of credit
• You’ll only have one repayment to meet
• You can spread the repayments out, so that they’re more affordable
• You may be able to make additional repayments and knock off your debt sooner.

While debt consolidation is not right for everyone (in some instances, you may end up paying more in interest over the course of the loan), it’s at least worth investigating.