Refinancing if your personal circumstances have changed
If your life is changing, it’s important to think about how your new circumstances might affect your home loan. At times like these meeting with your broker, reviewing your home loan and refinancing might just be the right solution for you.
If you have been made redundant, refinancing can be a very attractive option as it can help you save on your home loan when you need it most.
Although, there is a catch, refinancing may prove challenging if you can’t satisfy lenders with proof that you can repay the new loan. Therefore you will need to consider how you will service the loan, how long you might be unemployed for and which type of loan and features will suit you.
There are also actions you can take to improve your chances of approval. You can consider niche lenders, clear existing debt, provide evidence of genuine savings and consider a guarantor. You can also choose to work with an expert mortgage broker, who can help you understand your borrowing capacity and will be able to help you find the right lenders for your situation.
Whether you’re aiming to take a few weeks or several months off work for the arrival of your new baby, it’s worth thinking about how you will manage your home loan.
It’s especially important to be sure you’re on a competitive rate if your household income will drop while you’re on maternity leave, and that your loan offers the flexibility you may need during this period.
Your Aussie Broker can assess whether you could secure a more competitive rate, or if switching to a fixed rate home loan is the right move. It could give you the benefit of stable repayments for the duration of the fixed term.
Talk to your Aussie Broker to see what’s involved in applying for a home loan when you’re expecting a baby, or managing your home loan while you’re on maternity leave. A bit of forward planning could give you the best of both worlds – a new bundle of joy and a home loan that fits seamlessly into family life.
When going through a divorce one of the many items you will need to consider is the ownership of your home. If you decide to buy out your ex-partner's share of the house, you will need to refinance to a new loan that is solely in one person’s name.
In Australia, the bank does not allow you to simply remove an individual from the loan agreement. Your option is to refinance so that the new loan is in either in your name or the name of the individual who is taking on the property.
The best place to start when modifying the details of your mortgage, is to speak to your Aussie Broker who can help you through the process.
Ideally, many Australians aim to pay off their home loan before they enter retirement. However, if you are still paying off your home, refinancing after you retire could save you money through a lower interest rate, saving you money over the life of the loan. It can also help you gain access to the equity you already have built up in the home.
However, due to your life stage there are some factors to consider when refinancing. You will need to be certain that you can make the repayments for the new loan without a steady income and cover the costs of refinancing as well.
While refinancing when retired might have some challenges, it doesn’t mean it can’t be done. It’s a good idea to reach out for expert support, as having a mortgage broker on your side can help get your loan application over the line.
If you’ve filed for bankruptcy in the past, it can be difficult, although still possible to refinance your home loan. Unfortunately, bankruptcy is recorded on your credit history for seven years, which means it will affect your borrowing capacity during this time.
If you’re an undischarged bankrupt, many lenders will not offer you finance, so applying for a home loan after you have been discharged is recommended.
If you’ve been discharged from bankruptcy, there are some options available. However, home loan products for discharged bankrupts can come with a higher interest rate.
Remember, you do not need to go through the process alone. Reach out to an expert Aussie broker who can identify a number of suitable lenders for you, so that you can compare your options and match the loans with your needs.