When life changes, you might decide to refinance your home loan
If your life or personal circumstances are changing, it’s important to think about how your new situation might impact your home loan. When aspects of your life change in a significant way, it would make sense to meet with a broker. By doing this, you can review your current home loan and discuss the possibility of refinancing, which could be the right solution for you.
If you have been made redundant, refinancing your home loan might help you reduce your repayments when you need it most.
There is, however, a catch. Refinancing may prove challenging if you can’t satisfy lenders with proof that you can repay any new loan you take out. There’s a couple of things that you’ll need to consider. How will you service the loan? How long are you going to be unemployed for? Which type of loan and features will suit you?
There are also things you can do to improve your chances of approval following a redundancy. Consider niche lenders, clearing existing debt, providing evidence of genuine savings and consider using 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 or your partner will manage your home loan during this period.
It’s especially important to be sure you’re on a competitive rate if your household income will be impacted while you or your partner may be on maternity leave or unable to work. It’s also worth checking that your lender 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. A fixed rate loan gives you the benefit of stable repayments for the duration of the term, meaning you’ll know exactly how much you owe each time you need to make a payment.
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 if your financial position is impacted. A bit of forward planning could also give you the best of both worlds – a new bundle of joy and a home loan that fits seamlessly into family life.
Going through a divorce can be hard enough without the added financial stress. Unfortunately, the ownership of your home is one of the many things you will need to consider. If you decide to buy out your ex-partner's share of a house on which both of your names are included in the title, 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 across the life of your loan. It can also help you gain access to the equity you’ve already built up.
It’s important to note that due to the stage of life you’re currently at, there may be some extra considerations when it comes to refinancing your home loan. You will need to be certain that you can make the repayments for the new loan without a steady income. You’ll also need to be sure that you can cover the initial 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. Having an Aussie 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 to you. However, home loan products for discharged bankrupts generally come with a higher interest rate.
Remember, you do not need to go through the process of refinancing alone. Reach out to an Aussie Broker who can identify a number of suitable lenders for you, so that you can compare your options best suited for your needs.