The pros and cons of house refinancing

Have you ever considered how house refinancing can improve your standard of living? There are many ways in which house refinancing can help homeowners financially. Refinancing your home is an effective way to access your home’s equity, consolidate debt and improve your standard of living. However, it’s important to consider the pros and cons of house refinancing before taking the decision to refinance your home.

SA Home Loans employs house refinancing experts that can assist you in refinancing your home. We know that every homeowner has a unique set of financial needs, and that a mortgage should be tailored to match these.

Take a look at the pros and cons of house refinancing below to see it is the right solution for you.

Pros of house refinancing

• Ease your financial strain

House refinancing can shorten the term of your mortgage or enable you to pay a lower interest rate. If your original loan term was 30 years and you have been making payments for several years, it might be wise to change to a mortgage with a shorter term, perhaps 15 or 20 years, and a lower interest rate. House refinancing with SA Home Loans can lessen the burden of your mortgage.

• Access to your home’s equity

Your home has likely been steadily increasing in value since you purchased it, and house refinancing is a way to access this equity. Many people wait until they sell their homes to make use of the accumulated equity, but refinancing your property gives you the opportunity to use it now.

This amount can be used for a variety of different things. Homeowners may choose to renovate their homes, buy their dream car or fund their children’s education with these funds.

• Consolidate debt

House refinancing is often used as a way to consolidate debt and reduce the amount of interest that is being paid on existing debt. Credit card companies, for example, often charge interest rates of up to 25%, while interest on home loans is much less. The result of consolidating your debt is that you can pay a reduced interest rate on this amount.

Cons of house refinancing

• A setback on your mortgage

If you have spent many years diligently paying off your mortgage, refinancing your home might feel as if your efforts have been in vain. However, if you have done your research, house refinancing can reduce the term of your home loan and ease other debt that you may have.

• Reduction of equity

By refinancing your home, you are reducing the amount of equity that you receive when you eventually sell your property. On the other hand, house refinancing gives you access to your equity earlier than if you were to wait until you sell your home, and if the money is used wisely, the benefits will outweigh the decrease of final equity.

House refinancing: Make an informed decision

SA Home Loans specialises in house refinancing and offers a solution that benefit homeowners who want to make use of their equity before selling their home. Make use of our affordability calculator to find out whether you qualify for house refinancing through SA Home Loans.

Contact SA Home Loans now on 0860 2 4 6 8 10 to discuss your home loan needs with one of our house refinancing experts. Alternatively, visit your nearest SA Home Loans branch.