In times when interest rates are going up it makes sense to shop around to find a better mortgage deal to get a bit of relief in your wallet. Before you do though, check out these reasons to refinance to make sure you get the most out of your mortgage.
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01 To Restructure Your Mortgage
To reach mortgage and financial freedom, you’ll need to pay off your mortgage debt as fast as possible. Refinancing so you can restructure your mortgage to implement your a mortgage debt reduction strategy is a smart move that could help you pay off your mortgage in 15 years or less.
02 To Lower Your Interest Rate
Many Kiwis are concerned about interest rates since they’re always changing and a rise in interest rates can be costly.
What our clients know is with the mortgage debt reduction advice that we give at Futurebound, you won’t need to worry about interest rates so much. Since you’ll be on track to paying your mortgage off in 15 years or less, you won’t need to refinance every few years.
Instead of purely getting a lower rate for 1-3 years, use a refinance to implement a targeted mortgage debt reduction plan, so your mortgage will be structured so that you’ll pay the least amount of interest over a longer time.
03 To Change Your Loan Term
Many New Zealanders refinance to shorten their loan term to save on interest. The lower the loan term, the more money in your pocket.
However, this locks you into a higher minimum repayment which can be limiting to your budget in the event your circumstances change. Talk to us about how you can save money on your mortgage without losing flexibility in your budget.
04 To Borrow More Money
If your home’s value has increased, you may have enough equity to take cash out for renovations, an investment property, or other expenses.
Keep in mind this article is providing general information and not individual financial advice. If you’d like a review of your situation and customized advice for building wealth to reach financial freedom and live a fulfilling life, please book a free 15-min chat.