Benefits of refinancing

What is home refinancing?

Your neighbour’s done it, your friends are doing it, and even your co-workers are talking about it. But what exactly is home refinancing, and how can it benefit you the same way that it’s helped them?

Quite simply, home refinancing is one of the most effective ways to release cash, reduce monthly expenditure and improve your financial position, if done correctly and for the right reasons.

More than ever, people are looking for ways to save money and free up more disposable income each month. One of the most effective ways to ease your budget is by cutting one of your greatest monthly expenses: Your home loan installment.

Home refinancing, in many cases, can reduce your bond repayments substantially, which is why so many people are choosing to refinance their properties.

When facilitated by home refinancing experts and managed efficiently, home refinance can be the most intelligent financial decision undertaken by a homeowner.

If your primary goal is to decrease your monthly bond installments and manage your finances more efficiently, then refinancing your home is a viable and worthwhile option – particularly if you’ve owned your home for at least 3 years.

How Does Home Refinancing Work?

It is the nature of property to increase in value over time. This means that if you’ve owned your home for a number of years, the likelihood is that it’s worth more now than it was when you purchased it.  When you refinance your home, you’re securing a new mortgage for your property based upon its current value, and not on the amount it was valued at when you took out your initial home loan.

This gives you access to equity that you can use to improve your standard of living or strengthen your financial standing.

Equity Explained:

If you owe R 500 000 on your home loan, but your home is worth R 800 000, there’s a R 300 000 difference in value. This is known as “equity”. Through home refinancing, you can apply to access this equity. Basically, equity is the difference in value between what you owe on an asset, and the value of that asset.

If you refinance your home for its current value, you could access the equity accumulated in your property. Essentially, it’s a line of credit being extended by your lender, and thus you will pay interest on it.  However, if you secure low interest rates, such as those offered by SA Home Loans, it offers a valuable means of improving your financing position or paying for major or unavoidable expenses.

What Are the Reasons for Refinancing your Home?

There are a number of reasons for refinancing property in South Africa. First and foremost, individuals who refinance their homes usually wish to reduce monthly costs, and home refinancing can go a long way towards achieving this goal.  Refinancing your home at a lower rate could translate into savings of several hundred rands – if not more – each month, and an overall saving of tens or hundreds of thousands of rands over the life of the loan.

Another reason for home refinancing is equity release.  Some homeowners are happy to leave their equity untouched, or are lucky enough not to need it. Others, however, require access to the significant sum in order to settle debt, pay tuition fees and repairs, or for a variety of other important or pressing reasons.  When you refinance your home, you’ll gain access to this equity at a competitive interest rate, which means that you’ll have the cash you need at an interest rate you can afford.

Lastly, individuals who find themselves in a tight spot financially often choose to refinance their homes in order to consolidate debt. Debt consolidation allows individuals to combine their debt into one lump sum and repay it at a more affordable interest rate than they’re currently paying.  Home refinancing experts can help you to do this successfully.

How to Refinance your home

If you decide to refinance your home, it’s important that you do it through a reputable company that is able to offer you low interest rates.

At SA Home Loans, we offer some of the lowest interest rates available in the country, which makes us an ideal provider of home refinancing services. Moreover, the process of moving to SA Home Loans from your current lender is simple, speedy and hassle-free. We do all the hard work for you, and all you have to do is furnish us with a few relevant details.

To apply for home refinancing through SA Home Loans, start by using our refinance calculator, which will immediately give you an idea of whether you're likely qualify. If you provisionally qualify, click on the “apply online” button, complete the application form and we’ll take it from there.

Apply now to Refinance your Home with SA Home Loans

Start saving money today! Apply now for home refinancing from SA Home Loans, and you could benefit from significant savings and a more manageable bond solution. Contact us now on 0860 2 4 6 8 10 to speak to our home refinancing experts, and to secure the best deal on your new home loan.