2018 Guide to Refinancing
Wed 15 Aug 2018
Re-evaluating your finances should be an ongoing practice in your life. You might forget to check your finances from time to time, but you need to know that there are many benefits to it. By checking whether your financial situation is in a good state or not, you could be at an advantage, especially when it comes to taking a home loan.
So, the following paragraphs will show you why checking your home loan is going to help you in the long-term.
Good News for Investors
According to experts, many banks are raising their interest rates. There are some past events that may have influenced this. Apparently, in many states, investors had additional taxes on them. Moreover, some of the advantages that buyers enjoyed have been cut (for example, stamp duty concessions). Even though the changes have not been that big, if a new government comes into play, the situation could be different.
Also, there are fewer apartments on the market in some states. So, it seems that this year, there are going to be fewer investors on the market. It might be more competitive for banks to find borrowers as well. Thus, it’s a great time to shop around.
At the Moment, the Interest Rates are Low
It makes sense to look for lower interest rates. After all, the repayments are going to be lower if your interest rate is also low.
Still, it is likely for interest rates to rise over time. However, they won’t change soon, according to RBA. Thus, it’s a good time to refinance.
Flexible repayments could help you pay your loan faster and special feature loans have the advantage of paying in a low interest rate environment. Therefore, it’s worth a try.
Experts say that if rates are low and you have an agreement with your lender, you could do something to your advantage. It would be better for you for in the long term if you pay a bigger amount of your mortgage. If you have an interest-only loan, it’s a great time to use it near the end of the interest-only period.
The Reason for the Rate Increase
As mentioned above, interest rates are very likely to grow, even though this is not going to happen soon. She explains that the increase in demands for services and goods happens because of the economic strength of the US, Japan, and China. These three countries are Australia’s biggest trading partners.
The US is expected to see different conditions over the course of the next years, unlike China. Also, the US has a good economy with a continuous and fast growth and the demand for Australian exports is rising. This has a good impact on the Australian economy, as it helps it grow, and gives it reasons to increase the rates.
We hope that the information above will offer you some guidance when it comes to refinancing. Remember that checking your finances should be on your to-do list, as you never know when opportunities might appear.