“Why you should complete a home loan health check now.”
As we are approaching the end of winter, it’s common for people to have caught a cold or flu, and most would have done something about it like visited their GP or TCM for treatment or brought some over the counter medications and spend some time at home recovering.
For those with a home loan, we have been hit with interest rate rises almost on a monthly basis from May 2022, and for those who have enjoyed a low fixed rate and now paying significantly more now that the term is up, it’s interesting to see how people have responded.
Most share their dissatisfaction with their family, friends, and colleagues, and might even go so far as to share their economic perspective on if it’s the “right” move to increase rates or not.
Some complain to their lender and try to negotiate a better deal.
Others seek out the expertise of a mortgage professional to get a better rate for them.
The problem with all of these these responses is that a) talking with taking action doesn’t change anything, b) negotiating with your lender may result in a small rate reduction but it’s likely that there are better deals out there for you, and c) its not all about getting a better rate.
Sure, getting a better rate can help, but the question that you should be asking is help what?
Are you refinancing to a lower rate and keeping your loan term the same, or worse, extending your loan term out to 30 years again? If so, the result if most likely you are going to pay off your home loan in the same amount of time or it will take you even longer.
Refinancing to a lower interest rate can help to improve your cash flow, but if you aren’t using your cash flow savings to help you pay off your home loan faster, we would argue that you aren’t making the most of the opportunity.
Completing a home loan health check is an assessment that goes beyond just finding a better rate. It assesses if your current loan fits your current financial and personal needs.
Completing regular home loan health checks has many advantages.
If paying off your home loan faster is important to you, it can help to identify and implement strategies to help you achieve this and check in on your progress.
If you are wanting to renovate your home or buy an investment property, a home loan health check can correctly calculate how much equity you have in your home and unlock it for these purposes.
Home loan health checks can help identify the need and provide access to home loan features that may be important to you like redraw facilities, enabling you to access extra mortgage repayments, and offset accounts, that lower your interest you pay on your mortgage each month.
You may have been comfortable in the past with a variable rate loan, but now you may feel more comfortable with a fixed rate loan.
Finally, getting access lenders that are offering lower interest rates can help to free up more cash flow enabling extra home loan repayments to help pay off your home loan faster.
When was the last time you stopped and got a check up on your home loan?
This a just one of our FREE services.
Click here to access home loan health check now!
Have a great week!
The Team at Build & Protect Financial Services
