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What are the reasons people refinance?
People refinance for various reasons, which may include the below:
- Refinance for better interest rates and cash back with the new bank.
- Refinance to consolidate more expensive debt into the home loan.
- Refinance to improve the terms of the lending, e.g. extension of interest only terms.
- Refinance to fund purchase of a business, where the other bank is more receptive to the proposal.
- Refinance to fund purchase of a rental property, where the other bank is more receptive to the proposal.
- Some property investors like to spread their properties portfolio with different banks and may refinance part of their lending to other banks.
- Refinancing also could be a good opportunity for customers to restructure their lending as per their current needs and objectives.
Read Also – How Does Equity Work When Buying a Second Home?
What are the benefits of refinancing?
- Competitive interest rates, together with a generous cash back by the new bank.
- You may potentially save thousands of dollars by refinancing and consolidating your more expensive debt.
- Opportunity to better structure the lending as per current needs and objectives.
- Different banks have different lending criteria, and their offered terms could be different. It may be prudent to Refinance Loan to a bank which offered the best loan terms.
- It may help you achieve your goals of investing in rental properties.
- It may help you being able to purchase the business that you’re looking to buy
Am I eligible for a refinance on my loan?
How much money can I get when I refinance?
It will depend upon your particular situation, which among other things will include how much equity you have and will depend upon the level of your income. The mortgage advisor can give you an indication of your borrowing capacity before submitting the application to a bank.
Will I receive a lower interest rate on my refinanced loan?
What do I need to qualify for a refinance?
As a minimum, it will include:
- Purpose – the proposed refinance should benefit you in your situation.
- Equity in your properties.
- Income enough to service the loan.
- A good acceptable credit history.
- A good acceptable account conduct.
How will this refinance affect my monthly payment?
Is it a good time to refinance now?
How much will a refinance save?
Subject to your individual situation you may save thousands of dollars by refinancing to a lower interest rate and also from the cash back that the banks are currently offering for new lending.
What is the impact of refinancing on my credit score?
What are the costs of refinancing? Is there any fee required when refinancing?
What are the documents needed to refinance?
It depends upon your individual situation but generally will include the below as a minimum:
- Your identification documents, such as passport, driver license.
- Your income related documents, e.g. pay-slips or financial accounts for your business or IRD returns etc.
- Statements for your bank accounts, including home loans.
- Statements for your other loan accounts, if any.
- Copy of the latest trust deed with variations, if applicable.
- Rental agreements for all rental properties, if applicable.
How does equity work in refinancing? How much equity is required to refinance?
Do you need to get a new property valuation done when you refinance?
Not normally but if no online valuations are available for some reason, the banks may require a registered valuation completed.
How long does refinancing take?
Once your loan application has been approved, you may potentially refinance within seven to 10 days.
Can I consolidate other debts into this loan?
Yes, you can if it benefits you in your objectives.