Why re-financing is good for you!

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Let’s face it the paperwork involved in applying for a mortgage is enough to turn anyone off re-financing, am I right? Right! BUT re-financing doesn’t just apply to your home and it shouldn’t be feared, it should be embraced and here’s why. Businesses are competing for your business at all times so take advantage of that so you can secure a lower interest rate on your home or credit card or family car. What does this mean? It means lower monthly payments and ultimately the ability to pay off your debt faster which takes the pressure off the family budget like nothing else.

Re-financing your mortgage, yes it’s a pain in terms of paperwork but it also allows you to access any equity in your home (always be careful not to take too much of this equity) and this equity can then be used to consolidate other debt, such as the car or credit cards or it can be used to finance a renovation on your home, adding extra bedrooms or bathrooms for example.

When it comes to re-financing the car and credit cards, well that’s a different story, much quicker paperwork wise, phew, and must faster, assessment wise.

Also be sure to shop around, there are loads of finance comparison calculators like Rate City or Canstar so before you commit make sure you get the best deal you.

Another point to remember, especially for the mortgage, is not just the interest rate, of course that’s most important, but also the loan term needs to be considered. If you’re paying down other debt or focusing on retirement savings, throwing more money at your mortgage may not be worth it.

Lastly be careful for any hidden fees when dealing with a new lender also, an account management fee or annual fee may offset any savings you make in switching lenders so even though you’ve done the forms before, don’t skimp on reading them as it may come back to bite you in the you know where.

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