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Mortgage Refinancing FAQWe at Australian Mortgage Exchange have designed our FlexiFree® mortgage refinancing solutions with what most people are looking for in a home loan today; The Total Banking Solution To apply for our mortgage refinancing loan click here now.
Frequently asked questions on mortgage refinancing.What benefits can I expect from mortgage refinancing? How much can I expect to save after mortgage refinancing and debt consolidation? Are there any points I should be careful of when refinancing my mortgage? Can you refinance when I am behind in my credit repayments? How much does mortgage refinancing cost? What benefits can I expect from mortgage refinancing?Mortgage refinancing can benefit you in many ways, including reducing monthly repayments, [debt relief] reducing the number and type of loans you repay, [consolidation] and free up more of your income for debt reduction or lifestyle expenses. [debt reduction] Apply for Mortgage refinancing I have heard that debt reduction or mortgage reduction can save thousands in repayments and years off my mortgage by mortgage refinancing. Is this true?This can be true, but depends on how you manage your mortgage and other credit once you have refinanced. Essentially if you use the money freed up by the mortgage refinancing to pay down the loan amount owed, then this would be true. On the other hand, people who choose an interest only facility and then only repay the minimum amount, will be worse off eventually. This strategy may lead you to owing more and paying more in interest on the loan, as the loan, and the other loans consolidated would never be paid out. Basically if you want to pay out your mortgage faster, you have to make extra repayments, on top of the interest and principal payments that you are now making. Mortgage refinancing can free up this money to do just that, but you must be disciplined to achieve the goal of being debt-free sooner. This is of course nearly possible to do with a growing family and existing high interest debt without making for tough decisions and sacrificing small immediate pleasure for a long term goal. In particular if you are finding that your credit card debts are growing, [check the year to year balances over the past five years] you have to realise that you have been living on more than you earn, maybe for years, and this has to be thought through when considering refinancing. That is, the extra money that you have spending on credit will be taken away from any debt reduction plan, unless you change your budget and spending patterns. We have found this is particularly a challenge for the young family with incomes form $70,000pa to $90,000pa, with good jobs. They freely, save little if anything and don't have a family budget. One of the biggest problems we find is that people don't realise how much of their wages are going in taxes, insurances, car expenses etc. So its important when consolidating debts into the Mortgage Refinancing, that you ensure that you have a budget that you can stick to, and that pay the loan amount down in a consistent manner, by making extra loan repayments with any money surpluses achieved by the refinance, after your credit card growth has been accounted for. Otherwise the credit card debt will start to creep up and in five years you'll be looking to refinance again! This is one reason why we don't like lines of credit. The dream often doesn't become the reality due to lack of planning or discipline. We designed the FlexiFree® home loan to maximise your debt reduction efforts, but at the same time pay down the loan automatically through payments over the term of the loan [your back up system]. With competitive rates and no account keeping fees, and free internet and phone banking, as this will help with debt reduction. But the real benefit is in the ability to direct salary credit the mortgage, [free] and the ability to make unlimited redraws and extra repayments, again free. Apply for Mortgage refinancing I have a business loan secured against our home. Can you refinance business loans with mortgage refinancing?We originate loans for any worthwhile purpose. If you want to refinance your mortgage for a business loan, and you will benefit by this, we would be glad to help you achieve this. You must be able to service the loan from your income, which you will have to verify. We believe that you should get financial advise from your financial adviser to ensure that this is a sound strategy for you. Where you cannot verify your income, as in the case of many self employed people and those in small business, we may be able to offer you a lo doc or self certifying loan. You will generally have to have a bigger equity in the home than an income verified loan, and you may have to pay a premium over and above the standard variable rate. However this will allow a fast refinance, and you can verify the income later to achieve a more competitive rate, or simply meet the repayments in a timely manner over the set period and your rates will automatically drop, without ever having to prove your income. Apply for Mortgage refinancing I am struggling with making all my credit cards, car loan, appliance loans, car loan and mortgage repayments. Can I consolidate these into one home loan?Most mortgage refinancing is done to reduce the stress of having to meet lots of high interest credit repayments every month. If your equity in the home permits, we can consolidate all your loans, and even allow cash out, by consolidating the mortgage and all debts, at below most banks standard variable rates. This will give you the debt relief you are looking for. Again you should pay the all the debts consolidated as quickly as possible, or you will have more debt than you started with. Many people take the view that they are in front because rising prices have increased their net worth. The only true measure is being debt free, by using a debt reduction strategy that you can stick to. Apply for Mortgage refinancing Will mortgage refinancing coupled with a debt consolidation of my many other loans reduce my monthly repayments?Yes. It will reduce the monthly repayments by a significant amount. And because our loans have no account keeping fees, it may save you several hundred dollars a year in all the retired debt fees and charges. You must realise that part of this effect is due to taking short term high interest debts and placing them into a 25 year mortgage. So the car loan that had 4 years to run will take be repaid over the life of the mortgage. Again this would be OK if pay out the car loan element in the increased mortgage within the 4 years you would have paid the loan. Apply for Mortgage refinancing How much can I expect to save IN MORTGAGE REFINANCING?That is a good question, and it is an open question so it needs qualifying. Firstly yes, you will save a substantial amount in monthly repayments. We can tell you this when we have seen your situation. But when you stretch the repayments over the life of your home loan, you may in fact pay more in total interest over the life of the mortgage. Finally you have to take into consideration that had you paid the short term loan out on its own, that this in itself you give you the debt relief you are looking for. E.g., the car loan could be paid in a shorter period by making larger repayments. Obviously if you are struggling with debt now, then the best course may well be the debt consolidation and mortgage refinancing. Apply for Mortgage refinancing Are there any points I should be careful of when refinancing a mortgage?Only as we have stated above, that you are aware that the reduced repayments are from lowered overall interest rates, coupled with the stretching of short term loans over the life of the mortgage, and that you should compensate for this by adding the extra repayments off your mortgage required to at least pay this out. Apply for Mortgage refinancing Can you refinance my mortgage if I am behind in my mortgage or other credit repayments?If you are behind in your mortgage repayments, and that causes default interest to be added to the loan, and coupled to this you are struggling with other debts and the credit card is on its limit, then the way out may be refinancing. When this happens its best to refinance sooner than later, as your credit rating may become impaired as you default on your existing credit obligations making it difficult to set your loan at prime lending rates and then we can only assist with higher interest non conforming loans. Apply for Mortgage refinancing How much does mortgage refinancing cost?The costs of refinancing are usually added to the mortgage refinancing, and will vary from lender to lender and may vary State to State. Also any mortgage insurance required may add to this, and in fact could be more. This is only where the mortgage document is the original stamping document, and the borrowers details don't change. We can give you an indication when you contact us. If the number of owners or the owner names change, then stamp duty on the mortgage transfer will add further to the cost of the refinance, again this is a State tax or fee, and will vary from state to State. Also the costs have to be looked at from two points. The basic cost, and the interest on that sum. This is a further reason why mortgage refinancing needs to be looked at from a debt reduction standpoint, and not just as short term debt relief, and that increasing the repayments with the saved repayments will reward the borrower in the mid to long term. |