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Your Complete Guide To Mortgage Refinancing

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Your Complete Guide To Mortgage Refinancing | Debt Consolidation Techniques

What is mortgage refinancing and how can it help you to reduce your debts?

Mortgage refinancing and debt consolidation can be a solution
to debt and financial troubles.

Work out if home loan refinancing and debt consolidation are the right debt solutions for you

At Get Out of Debt Today, we have vast experience in helping people to refinance their mortgages and consolidate their debts. That’s why we decided to compile this knowledge into one go-to guide for your reference, to guide you through the mortgage refinancing decision and process.

What Is Mortgage Refinancing?

What Can Mortgage Refinancing Do For My Debt Situation?

Mortgage refinancing is when you take out a new home loan which you use to pay off your original one. You then have a new mortgage with a new rate, new terms, even a new creditor if you wish. Get Out of Debt Today can get you the lowest interest rate and the best terms when you refinance your mortgage, because we will negotiate with creditors on your behalf. Creditors like your current bank or lending institution give reward rates and benefits to debtors who refinance their home loan through Get Out of Debt Today because they know that they feel more certainty that their loan will be repaid when their debtor is under the financial guidance of an organisation that consistently has great success. Furthermore, one of the fundamental advantages of mortgage refinancing is that it makes creditors compete for your debt. Your current bank or lending institution will compete against others to provide the lowest interest rate with the most benefits for you to take, and Get Out of Debt Today will guide you to the best decision.

When Is Mortgage Refinancing A Good Financial Solution?

Should I Refinance My Mortgage?

Mortgage refinancing can have large financial benefits. Chiefly, it can get you a lower interest rate on your home loan, and this regularly saves people tens of thousands of dollars over the course of their mortgage repayments. But in some cases, mortgage refinancing is not the best option. This section guides you through the conditions in which mortgage refinancing is and isn’t a good financial solution:

Summary Of What To Consider Regarding The Mortgage Refinancing Decision

When refinancing is a good financial solution:
  • A significant change occurred in your financial situation.
  • You are are seeing mounting debts and want to undertake debt consolidation to reduce them.
  • Your current interest rate isn’t staying competitive to others in the market.
  • You wish to change creditors.
  • You have multiple debts and wish to consolidate them
When refinancing isn’t a good financial solution:
  • There are high penalties on exiting your home loan.
  • You might transfer ownership of the property shortly in the future.
  • Since your current mortgage, your credit history has deteriorated substantially.
  • You’ve got an uncertain income over the period that you will be taking the home loan.
  • Tax Considerations

The rest of this section will explain each of these points.

When Refinancing Is A Good Financial Solution

A Significant Change Occurred In Your Financial Situation.

This is a fairly common and very reasonable cause for seeking mortgage refinancing. It is often the reason why people consider mortgage refinancing in the first place, before realising that had they been in financial strife or not, refinancing their home loan could save them a lot of money.

Get Out of Debt Today consults with you over your financial situation and organises a budgeting plan with you if you access our mortgage refinancing and debt consolidation services to get your finances back on track.

You are are seeing mounting debts and want to undertake debt consolidation to reduce them.

If you have noticed that you have growing debts, your budget is not balancing and neither is your bank account, and even that you have multiple debts, spiralling debts or etc., then you should seriously consider Get Out of Debt Today’s mortgage refinancing and debt consolidation solutions. We can save you the money and manage your finances to get you back on track.

Your current interest rate isn’t staying competitive to others in the market.

This reason to refinance your mortgage makes solid economic sense and it’s one of the best reasons out there. If your home loan’s interest rate started out as the best rate you could find, lower than competitors, but now is higher than them, then you should probably switch to the home loan with the new lowest rate.

Even a slight decrease in your interest rate can add up to large amounts of money saved (or unnecessarily paid) by the end of your home loan. It’s best to switch as soon as possible when you realise a better rate, so you save the most money.

You wish to change creditors.

It is well known by us and many debtors that creditors can be pushy in getting their loans repaid. In the worst case, they may hire a debt collector to extract their repayments, and these often do everything within their legal limits to do so.

One of the other most common complaints about creditors is that they don’t provide good support or service. Obviously you can’t expect them to be your financial planners, but if they aren’t responding to correspondences promptly, especially urgent ones, then this is inadequate and you need to find a solution.

If you don’t like the way that your creditors or debt collectors are treating you, then you mortgage refinancing gives you the option to switch to another creditor. “But what if they treat me the same?” You might ask. Get Out of Debt Today will consult with you to make sure that you follow a budget and out financial management plans to ensure that with your cooperation, your new creditor, or original creditor will be kept happy.

You Have Multiple Debts And Wish To Consolidate Them

Mortgage refinancing is a prime opportunity to also undertake debt consolidation, which Get Out of Debt Today also provides, because it has its own large financial benefits. When you refinance your mortgage, you can choose to bundle some of your other debts into the one new loan that you take out with your creditor. This works in the same way as mortgage refinancing. You take out a new loan in order to pay off your other loans (including your mortgage).

When Refinancing Isn’t A Good Financial Solution

There are high penalties on exiting your home loan.

Some home loan plans include penalties for pre-termination. We will include this in our calculation of whether switching to a lower interest rate will still save you money overall.

You might transfer ownership of the property shortly in the future.

If your home loan is already almost repaid already, then it may be worthwhile just to finish it. If this is the case, there won’t be much money to save by switching to a lower interest rate, although unfortunately, potentially if you mortgage refinanced in the past there could have been.

Since your current mortgage, your credit history has deteriorated substantially.

If you’ve run into financial trouble since you took your current home loan, and this impacted your credit history to a substantial degree, then it may make it hard to get a loan with a lower interest rate than the one you have currently. Get Out of Debt Today will look at your finances and credit history to determine whether your chances of getting a lower interest rate are good enough to warrant seeking one through mortgage refinancing.

You’ve got an uncertain income over the period that you will be taking the home loan

If you can’t prove a steady income to lending institutions and banks then this may also make it hard to get a low interest rate. If you had a steady income when getting your first home loan, then in a lot of cases, you won’t have a high chance of finding a better one. But if you also didn’t have a steady income the first time, then mortgage refinancing may still be able to get you a better home loan deal.

Tax Considerations

Mortgage refinancing may make you unable to claim any tax deductions on expenses incurred from the property for the duration of the mortgage refinancing loan. You need to be aware of if this will occur in your case and if so, then is it still financially worthwhile for you to refinance.

Mortgage Refinancing—Making Sure It’s Not An Excuse To Accumulate More Debt

Mortgage refinancing and debt consolidation may provide for you an instant release from debt. Depending on what terms we secure with your new loan, you may see your debts drop significantly overnight. The feeling will be exhilarating and uplifting, but the precaution is: don’t let it be a reason for accumulating more debts.

Unfortunately, it’s not an uncommon story for mortgage refinancing and debt consolidation to cause people to drop straight back into their old habits of overspending (or develop new habits in the new freedom). This can result in your debts climbing back up to where they were but with a larger home loan on top of it. These tips will help you to avoid that.

For those in risk of falling victim to this trap, a ‘split’ debt consolidation is often recommended. This is where you have consolidated your home loan and other debts together, and they are all under the same easy-to-keep-track-of rate, but your home loan bills versus your other bills are split into two separate payments. This reminds you of the home loan that you still need to pay off.

To Take Advantage Of Low Interest Rates

Mortgage refinancing and debt consolidation into a larger home loan when there are low interest rates (like now) may seem financially on-the-ball, but interest rates are in fact, not a sound basis for your decision.

When you consolidate your home loan when interest rates are down, you will likely be able to get better interest rates, more benefits and etc. But this is a short-term gain. In the financial cycle, after interest rates go down . . . they go back up again. Hence you will in the future meet rising interest rates that may put you back where you started. In short: it is a short-term strategy for a long-term loan.

This is a consideration if you take a home loan now even if you’re not trying for short term gains. It is recommended that you can afford to pay at least a couple of percentage points above the interest rate that you take in case rates rise. Of course, Get Out of Debt Today will make sure that you can pay your loan and guide you financially towards this.

The Best Way To Know If Mortgage Refinancing And Debt Consolidation Is Right For You Is To Get In Touch With Get Out Of Debt Today

Get Out of Debt Today highly regards mortgage refinancing and debt consolidation for many types of people who are faced with debts and even financial distress. We are happy to assess whether these solutions are right for you, to make sure you can repay your new loan. And we think that in most cases, you will be able to, because the loan will be smaller, more hassle-free and easier to manage. And, we will guide you financially towards paying it

If you think that mortgage refinancing and debt consolidation can improve your debt situation, then call us on (02) 9011 7919 or fill out the form in the sidebar and we’ll contact you!

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