Home loan refinancing is when you want to replace your existing mortgage with a new one. With refinancing, you can secure lower interest rates, better terms, and get access to home equity. In fact, with refinancing, you can also reduce your monthly repayments. So, this is a great option when it comes to avoiding budget constraints. However, there are various myths surrounding refinancing, and here, we will debunk them one by one.

Myth 1: Refinancing is Too Expensive

Reality: Many people have the idea that refinancing is costly. However, this is not always true. Yes, there are certain costs involved but if you have the right deal with your mortgage broker with lower rates and fees can help you save more in the long run. Besides, some lenders can waive the application fees as part of the deal. What’s more, your broker will make the application process hassle-free to save time.

Myth 2: Refinancing Hurts Credit Score

Reality: Refinancing does not hurt your credit score if you are working with your existing lender. However, if you have opted for financial solutions from multiple lenders, your credit score can be impacted. Furthermore, since refinancing lowers interest rates and repayments, you can make payments easily, which can actually increase your credit score. Besides, you can reduce your credit utilisation, which can lead to a better score.

Myth 3: Refinancing is for People with Financial Constraints

Reality: Rather, it’s just the opposite. It’s a smarter move since you can get better rates, access to equity, and get overall repayment flexibility. You can opt for a reduction of your loan term and save on interest. So, if you already have a home loan, refinancing is a great option for you, and you can easily opt for it by discussing your needs with your mortgage broker.

Myth 4: Refinancing is Complex

Reality: You might have heard already that switching home loans is a complicated and time-consuming process. But actually, it’s not! It is quite easy since your mortgage broker will guide you through all the steps. They will manage the paperwork, liaise with lenders, and ensure that you receive a tailored solution. This way, you can save time as well.

Myth 5: Refinance is Available Only for Borrowers with Flexible Rates

Reality: Again, this is a popular myth since you can refinance if you have a fixed-rate home loan. However, you might incur break costs. Now, calculating it can be a bit complicated. However, if you have a reputable mortgage broker with you, the professional will give you a breakup. Most importantly, you can save more with refinancing compared to the costs involved.

Now that you know the reality, it will be easier for you to make the right decision. However, discuss all the mentioned points and the questions you have with your mortgage broker. This will give you peace of mind and enable you to reach your home-buying goals smoothly.

Need Home Loan Refinancing? Talk to Us 

Let Eight Finance assist you with refinancing. Schedule an appointment with us by calling 0420997270 or by sending an email to info@eightfinance.com.au. We will connect with you in no time.