Home LoanHow Soon Can You Refinance a Home Loan in Sydney

April 29, 2024

Borrowers consider refinancing to lessen the length of the loan or to be at a decreased interest rate to reduce their monthly charges. Refinancing a home loan is one way borrower’s can use it to leverage that investment.

Refinancing a home mortgage depends on several aspects like a comparison between the home loan mortgage rate and present interest rates, how long a client wants to live there and the breakeven point which is the time frame it takes to recover the refinancing expenses. Refinancing a home mortgage loan basically means that there is a switch from the original loan with a new home mortgage loan.

Steps on How to Refinance A Mortgage Loan

  • Choose the type of Refinancing
    Before considering when can you refinance a home loan, check this types of refinancing:
  • Rate and term refinance
    This option lets you change the interest rate and loan terms of your present mortgage. Your new mortgage loan could definitely have more satisfactory terms for your financial standing.
  • Cash-out refinance
    This type means getting a new loan out of a larger amount and receiving the difference between the two loan amounts in cash. You can use the cash that was received for home improvements or even buying another home.
  • Cash-in refinance
    The borrower will give a lump sum to their mortgage to grow equity and lessen the amount owed. This will result in a lower monthly payment and interest rates.
  • No closing cost refinance
    The borrower adds the closing costs into the principal amount of the new loan instead of paying them in cash in advance. This means for a higher monthly payment, but lessens the amount needed to close or finish the loan.

Check this Before Refinancing a Home Loan

Another thing a borrower must consider when you can refinance a home loan are the factors regarding their current mortgage. Here are they:

  1. Current Mortgage Age

    If you feel good about your current mortgage, check how many years of mortgage payments refinancing needed to be added. You could end up paying a lot of thousands more in interest if you refinance. And you pay basically for the interest of the first few years of a mortgage. The same goes to a refinanced mortgage loan. So instead of making progress on principal like you have done, you will be back to interest-only payments.

  2. Current Home Mortgage’s Prepayment Penalty

    A borrower might be charged a fee if they refinance their mortgage loan because they are basically completing the loan before it’s due. Check first the home loan’s terms about the prepayment penalty period and the penalty charge. If a prepayment penalty was incurred, take note of it as refinancing fees because it will help for an accurate assessment of what the refinancing will cost.

  3. Settlement Plans

    Refinancing the home loan is not recommended if there’s a chance to move within the next few years. Recovering the charges of refinancing takes a lot of time which can be easily figured out. If there’s a plan on selling the house before the breakeven point, refinancing is not recommended.

  4. Credit Standing

    The credit score is a sign and reflection of how responsible you are in your financial obligations. It changes as new information is added to your credit report. Remember, mortgage lenders mostly check your credit score from all the reporting bureaus, so you can too.

  5. Refinancing Points

    When you compare different home loan offers, be sure to look at the interest rates and the refinancing points. Do not miss to calculate how much you will pay in points with each loan because these will be paid at the closing or added into the principal of your new loan.

Is it Possible to Refinance with the Same Bank?

Yes, though it may not be the best choice. Refinancing with the present mortgage lender has some benefits though: They already have the information of the borrower and they may give you a good deal to stay with them. But the very best possible deal is not possible to find so it’s worth it to shop around.

Refinancing a home loan depends on the type of refinancing a borrower has. Some home loans allow refinancing as soon as possible after getting the first loan. Others require a time frame to pass by before refinancing which is also called “seasoning.”

Australian First and Mortgage Solutions for your Refinancing Journey

We are one of the leading financial services providers with expertise in the Australian mortgage market particularly in the Sydney market. As an admired company in the mortgage broking and financial services field, we are acknowledged for our extensive understanding of the refinancing process. We have built relationships with a broad association of lenders which allows us to have a selection of affordable and best loan products and negotiate good terms for our clients.

At Australian Financial and Mortgage Solutions we value that trust is the foundation of our business culture. We put a number one priority on transparency, truthfulness and client happiness in everything we do. Our commitment is to provide neutral recommendations and personalised assistance which has given us the trust of numbers of homeowners looking to refinance their mortgage loans in Sydney.

Refinancing a home loan in Sydney can be a very tiring and intimidating process but with us clients can get into this journey with ease. Our team gives personalised advice specific to each client’s financial dreams and situations which ensures that they make educated decisions that go with their long term goals.

Whether clients are looking to switch to a lower interest rate, access equity or consolidate debt, Australian Financial and Mortgage Solutions is dedicated to helping them reach their goals effortlessly and productively. Clients can trust us to help them through every step of the refinancing process and make sure to give the best possible solution for their financial track.

Ready to traverse your possibilities on when can you refinance a home loan in Sydney? Contact Australian Financial and Mortgage Solutions today for expert recommendations best for your unique financial standing.