Your home equity could be used for a wide range of purposes, such as funding home improvements or even going on a dream holiday. Here we take a look at how refinancing could help you achieve your goals.
Go on a holiday
Have you considered that refinancing could be the key to helping you go on that dream holiday? Well, you’re not alone. Some borrowers refinance their home loan to help achieve their desire to see the world, or simply take a break with the kids.
It’s important to put a plan in place to repay the additional debt, as once it is added to your mortgage it can increase your interest charges and repayments. With this in mind, it’s a good idea to only borrow the amount that you need for the trip.
Buy a car
If you are considering a new car but you’re not sure how to finance it, refinancing your home loan could be an option, however there are a few aspects to think carefully about. Adding the cost of a car to your home loan can mean that this cost is paid back over the full term of your home loan, so it’s wise to crunch the numbers to make sure it’s the right option for you.
Refinancing through either a line of credit loan or a construction loan is a common way to raise funds for a renovation budget.
Otherwise, you could consider a Construction loan, which is specifically for the purpose of building a property. The amount of a construction loan is based on the predicted value of the property at completion, which can allow borrows to access large amounts of money. To be eligible for this loan, your building plans must be approved by council and a building contract with a fixed price will need to be in place.
Buying and investing
Buying an investment property may be a good strategy for accessing rental return and potential capital gain, however, for many, saving to buy a property while already paying off a mortgage can be challenging.
So, refinancing your existing home loan and getting access to your equity to use as a deposit to purchase another property might be an option.
It’s a good idea to access suburb reports and seek advice to ensure refinancing to invest is the right decision for you.
Refinancing could be the way to reach your goal! Speak with your Aussie Broker to find out if it’s for you.