Refinancing is simply replacement of one debt obligation with another. According to the Wikipedia the main reasons for refinancing are:
- Take advantage of a better deal.
- Consolidate multiple loans into a best single deal.
- Reduce monthly (or whatever the case might be) loan repayments.
- Reduce penalties (for example by switching from fixed to variable).
- Mitigate risks (for example fixing interest rate).
- Free up some cash.
- Optimise your tax liabilities.
You need to start your Loan Refinance with a clear picture of what you want to achieve.
Mortgage Brokers are there for you to help you avoid the pitfalls.
Even when your goal is clear, Loan Refinance is not a trivial task. Typically, there are fees, penalties, conditions in existing and proposed loans.
The best way is to get a Mortgage Broker
to do all the math to make sure the Loan Refinance will be to your benefit instead of leaving you out of pocket.