Accessing Equity By Refinancing
If you own a home, you may be able to use its equity to finance a variety of projects. Let’s look at how refinancing can help you achieve your financial goals.
Accessing Equity By Refinancing
If you have equity in your home, you may be able to use that equity to finance a variety of projects, including renovations to your house or a dream vacation. Let’s look at how refinancing can assist you in achieving your financial goals.
Use Your Equity For A Vacation Of Your Dreams
Many borrowers have used the money they saved by refinancing a home loan to take a vacation, fund their children’s education, or fund other life goals.
When taking out a mortgage, it’s important to plan for any additional debt you may incur from holidays. This is because the cost of these holidays can be added to your mortgage, increasing your interest charges and repayment amounts. As such, it’s a good idea to only borrow the amount you need for your trip.
Access Your Equity To Purchase A Vehicle
When considering a new vehicle but unsure about how to finance it, refinancing your home loan could be an option. Before jumping in headfirst, carefully consider the following aspects of the financing process.
When you add a car to your home loan, you must pay back the loan’s principal and interest over the full term of your loan. For example, if you add $20,000 to a 25-year home loan at 6 percent interest, you would owe $15,000 in interest alone over the life of the loan. This can be more than what you’d pay in interest on a shorter-term car loan. Let your My LMI Group broker crunch the numbers so you can make an informed decision.
Refinancing For Home Improvements & Renovations
Line of credit loans and construction loans are both common ways to raise funds for a renovation budget.
If you do not have access to sufficient funds, you may consider a construction loan, which is specifically for the purpose of building a property. The amount of a construction loan is based on the predicted value of the property at completion, which can allow borrowers to access large amounts of money.
Buying or Investments
Purchasing an investment property can be a good strategy for creating rental income and potential capital gain. However, for many people saving to buy a property while already paying off a mortgage may be challenging.
You can use your home’s equity as a deposit on an investment property by refinancing your existing home loan.
Before refinancing to invest, it is a good idea to access property suburb reports and speak to an expert.
Refinancing your mortgage could be the way to reach your goal! Speak with your My LMI Group broker to find out if it’s right for you.
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