Why Refinancing Debt Can Assist Your Situation
Refinancing Debt is a simple way to allow yourself more time and cashflow to get on top of your finances. When debt becomes difficult to pay, it can put a lot of stress on your family and life. Refinancing Debt means your repayments become more manageable, increasing your cash flow and relieving the pressure. Some other benefits of refinancing debt include:
- Reduce monthly repayments by securing a lower interest rate.
- Consolidate other loans such as car, personal or credit card debt into one easy repayment.
- Finance renovations or extensions on their home by tapping into the equity
- Get better features included in your mortgage such as a redraw facility or the ability to offset accounts.
Fees, Charges and Interest Rates When Refinancing Debt
When refinancing debt properly, you must make sure your new loan will improve your financial situation, not make it worse. One of the biggest considerations you need to make when refinancing debt is whether your potential savings will outweigh the interest, fees and charges involved with refinancing debt. If you are refinancing debt through a new lender, your previous lender may have discharge fees, deferred establishment fees, break costs and loan or legal fees.
Your new lender may also charge home loan application fees, valuation fees, settlement fees, registration of mortgage fees, stamp duty and mortgage insurance. Every lender is different and some fees depend on the loan amount, such as the mortgage insurance. When discussing refinancing debt with your potential lenders, ask for a break-down of all the fees involved so you are well aware of what it will cost you to switch.
Things to Consider When Refinancing Debt
As well as weighing up the fees, charges and interest, there are a few other things you need to think about before refinancing debt. Is your life about to change in a dramatic way? Are you expecting a child, falling ill or looking for a new job? Will refinancing your mortgage assist you in these endeavors by saving you more money or are you trying to bite off more than you can chew?
Before you give up on your current loan, look at the extra features. Is it worth sacrificing the ability to redraw money to save on rates? You also need to look at who you are borrowing through. If you find a deal too good to be true, be sure you have done your research on the company offering it to you.
Help is Available
If this all seems overwhelming but you are seriously considering refinancing debt, help is only a click away. Positive Solutions Finance specialises in finding positive solutions for people in debt. It does not lend money itself, but rather calls on a range of affiliate lenders to find you the best solution. Positive Solutions Finance takes the guess work out of refinancing debt. The professional Case Managers will work through the numbers with you to ensure it is the best solution for you and then help you find a credible professional lender.
For more information on Debt Consolidation, check out our Debt Consolidation page.