If you’ve committed to a loan term but are finding yourself wondering if a better deal is possible, refinancing might be the right option. This may be because you were in a worse financial position at the start of your loan or have found a fixed rate home loan has you paying more interest than the current market rate. At Medipro Capital Finance, we’ve discovered that many medical professionals are unaware of the incentives available that can potentially save them tens of thousands of a home loan. In today’s article, we take a look at the benefits of refinancing a home loan and common reasons why more homeowners are making the switch.
Benefits of refinancing a home loan
What is refinancing?
Refinancing a loan involves taking out another loan to pay off an existing one. Though it seems counterintuitive, the new loan may have better terms and interest rates that are better suited for your financial situation. Aside from lower interest rates, reasons a person may see benefits of refinancing a home loan include:
- Better features such as redraw facilities, offset accounts and loan splitting.
- Changing a loan term for a better interest rate.
- Accessing a loan specific that offers incentives to certain job professions.
- Fixed-rate loan period is expiring.
- Property has increased in value.
Looking for mortgages for doctors? Contact Medipro Capital Finance on 1300 DR LOAN to arrange a confidential discussion about the benefits of refinancing a home loan today.
Why refinance a home loan as a medical professional?
What are the advantages of refinancing?
Change your loan term
Refinancing your home loan allows you to switch from fixed rate to variable or vice versa. If you’ve chosen a fixed rate and are coming to the end of your loan term or find the rate is too high, changing to a variable loan term can offer you a better deal. Similarly, if you’ve committed to a variable loan rate and find the fluctuations too volatile, a fixed-term offers more certainty.
Reduce home loan repayments
If you find that interest rates have decreased since you took out your original loan, switching to another loan could save you a significant amount of money per month. This can happen because of current market conditions or your new financial situation means you qualify for a loan with a lower interest rate. For example, if you’ve just completed your residency and have become a qualified medical professional, a lender may view you as a safe borrower and offer mortgages for doctors at lower interest rates.
Reduce home loan term
If you find you’re about to meet home loan payments easily but are locked into a loan that penalises top-up payments, one of the biggest advantages of refinancing is switching to a term that allows you to pay your house off quicker. This will also save you money in the long run, as you’ll be making fewer monthly payments that incur fees and interest rates. Comparatively, you can also choose to switch to a longer loan term if you’re having trouble meeting payments.
Access your home’s equity
If you’ve managed to pay off a good chunk of your home loan (i.e., $200K off a $600K loan) you can use the portion of the loan proportion of the property you own ($200K) as equity for an investment property, to start a medical practice or to undertake renovations. If you plan to purchase another property with equity, your lender may potentially wave lender’s mortgage insurance – though this is typically waved for medical professionals in general. If your current home requires extensive renovation work to improve its value, using equity can be a smarter financial decision than taking out another loan.
Consolidate your debt
If you have a few debts to pay off such as credit cards, medical loans, or car loans, you can consolidate them into a single payment. This can help you manage repayments and help you better track your finances. This can also help to balance out interest rates, with the potential to reduce monthly payments. One common way to consolidate debt is through refinancing. This means your original home loan will now be raised to include the amount needed to pay off other debts. This is a good option if your other debts have high interest rates but can end up costing more long term if the combined loan term period is longer than the original one.
Why refinance a home loan with Medipro Capital Finance?
Are you a medical professional looking to refinance their home loan for a better deal? At Medipro Capital Finance, we specialise in finding home loans for medical professionals at competitive rates. Whether you’re looking for dentist home loans or to refinance for a medical practice, we can help you find a better deal. To chat with one of our loan specialists, contact us today by calling 1300 DR LOAN, filling out our online form or emailing firstname.lastname@example.org.