Refinancing Your Mortgage to Invest
Refinancing is the method of altering your current mortgage in order to cater for your specific circumstance. Refinancing can allow for greater flexibility, consolidated debt, improved interest rate and the addition of other extra features.
A key feature of refinancing is that it allows home owners to gain access to equity. This equity is often used to borrow extra finance and purchase another property for investment purposes.
Undertaking mortgage refinancing is a popular way to manage your finances and allow a home owner to take advantage of lower monthly repayments. The extra money saved can contribute to servicing an investment property, which will assist in establishing financial security in the future.
Seeking assistance and advice from an accomplished mortgage professional can be highly beneficial to discovering just how much extra cash flow can be made available, through refinancing.
When choosing a new loan some important points are:
•- Interest Rates over the term period
•- Packaged Loans vs. Basic Loans. Packaged loans feature greater flexibility
And therefore are priced higher than your basic loan option. Determine what loan characteristics are more important to assist in your decision making.
•- Fees. Extra fees will present themselves upon termination of your existing
Loan, as well as when proceeding with your new loan.
Exiting Fees may consist of Mortgage Discharge Fees and Deferred Establishment Fees.
Entry Fees may consist of Legal fees, Application Fees, Stamp Duty and Lenders Mortgage Insurance Fees.
Paperwork:
If it has been decided that refinancing your mortgage is favourable to you and can help you continue with purchasing an investment home, certain paperwork will be required to apply.
•- Application forms completed
•- Proof of Identity (Driver's Licence, Birth Certificate, Passport etc)
•- Income Records (Last Group Certificate received, 2 payslips)
•- Home Loan Payment Statements (6 months)
•- Records of other payments, which will be consolidated (credit cards, etc)
•- Rental Income Records (If applicable)
•- Statement of Council Rates
Mortgage Refinancing can sometimes appear to be a complex and daunting task. The associated fees can often be a deterrent but the decision to consolidate may work out to be well worth the effort in the long term. Planning and research will enable the home owner to feel more in control of their finances. With the guidance and assistance of professionals the whole refinancing process can be a lot smoother and leave you wondering why you hadn't taken action any sooner.
