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Reasons to Refinance Your Home Loan

Refinancing your home loan is the smartest financial move and itcan be worth it if you plan on living in the same house for a long time since you can avoid those huge one-time charges. However, you often wonder if refinancing would make sense for you, and therefore, you prefer taking this decision by first understanding the reasons that refinancing would be a good option for you and whether it makes sense to do so in your particular situation. There are different types of refinancing that suit the needs and demands of different people, and the kind of refinancing that previously served as a good option for your friend oryour neighbor isn’t necessarily going to be a good opportunity for you since the long-term goals and financial picture of each person is different and unique from each other.

There are several reasons why homeowners may want torefinance their home loan, some of which include:

  1. Refinancing into a lower interest rate

The most obvious reason for refinancing is falling interest rates. A drop in interest rates means lower costs of financing. For example, if you have an existing 30-year mortgage at 6% and you have 25 years left on this mortgage, but rates in the current market go down to 4%, it is a wise idea for you to refinance into another 30-year mortgage at 4%. If you opt for this, it will increase your total interest payment since you will be resetting your loan, and paying your home off over35 yearsbut it will reduce your monthly payments.

  1. Refinancing into a shorter loan term

If you have an original mortgage of 30 years, you might want to refinance your 30-year mortgage with a 15-year mortgage, which will help you in reducing your interest payments but increase your monthly payments. You should only refinance into a shorter loan term if your new monthly payments are less than 25% of your total income as you don’t want all your income and salary going towards your house, right?Thus, if you aim to reduce the total interest payments on the mortgage, the 15-year mortgage is a good option for you but if you want your monthly payments to go down, the 30-year mortgage would be a better option. However, it is only wise to refinance if you plan on staying in the same house for a long time because later you will need to cover your closing costs as well.

  1. Consolidating high-interest debt

If you have a large and heavy amount of high-interest debt on your personal loans or your credit cards, refinancing lets you consolidate multiple debts of yours into a single home loan. Cash-out refinancing at even a slightly higher interest rate than before can help you in improving your cash flow situation and save you money in the long-term, along with getting you out of your debt faster.

To conclude, refinance is a tool which allows home loan customers to smartly manage changes in circumstances to their advantage. Timely use of this tool will help you reduce the cost of your home loan, and to do so, contact Opulent Finance today!

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Siraj Ahmed
Siraj Ahmed
2020-11-18
Verified review
Excellent service. Got us a great loan option and also worked with the bank to get the loan approved during the heights of COVID.
Dhruv Satra
Dhruv Satra
2020-11-18
Verified review
Malaka Ekanayake
Malaka Ekanayake
2020-11-10
Verified review
We have had a very pleasant experience working with Opulent Finance. We did not have that much experience with house loans as we were first home buyers but working with Opulent  Finance team specially with Ishara, made that experience stress free one. She helped us secure an incredibly competitive interest rate and offered her guidance so we can take advantage of the future interest rate drop. Thank you Ishara, Dayan and team for your incredible support and we have no hesitation what so ever in recommending Opulent Finance for your financial needs
Uma Gunaratne
Uma Gunaratne
2020-11-04
Verified review
Ishara is highly knowledgeable and if you are a first home buyer and new to the intricacies of all that home loans entail, she will really take you under her wing and impart her knowledge and experience and treat you as one of her own. She is also extremely patient but will also be very truthful and upfront in situations which is honestly what you need. She did a very complicated loan for us, and was so incredible efficient and organised with all the paperwork that was required. Not only that, she helped us secure an incredibly competitive interest rate! Ishara has probably spent hours and hours explaining to me details and giving me really good guidance through this momentous period in life! During the cooling off period and settlement, she was constantly chasing up our loan and honestly took a personal interest in the outcome. Our solicitor was also very happy about working with Ishara as she was following the entire process, was always up to date and very easy to work with. Considering that our entire process happened during the covid-19 lock-down and work from home environment, we have nothing but good things to say about how professional Ishara was as she didn't let a single thing slip. We are so glad that we have both Ishara and Dayan in our corner. We will definitely be using them for all future financing needs. Thank you Ishara, Dayan and team!
Harsha Ill
Harsha Ill
2020-10-11
Verified review
Opulent Finance gave professional advice for my unique home loan requirement. They respond quickly with the proper information. The process was smooth and I felt comfortable to deal with the team. The team is friendly and professional to deal with. Highly recommended for any one looking for finance.
S P
S P
2020-09-22
Verified review
I have been dealing with Ishara at Opulent Finance for over 6 months now and she has been faultless. She has helped me secure a loan pre-approval in no time and assisted me with my property purchases. I could not recommend Ishara highly enough.
Afshin Koohestani
Afshin Koohestani
2020-09-22
Verified review
Good service and offers.
Janaka Kumara
Janaka Kumara
2020-08-22
Verified review
A big shout out to Dayan and his team for the seamless service provided during the refinancing process. Thoroughly professional team that pays attention to every detail and has been extremely transparent throughout the process. A team that always has the best interest of clients in mind and makes all efforts to provide the right advise and outcomes to the clients. Highly recommended!
Rakesh Mistry
Rakesh Mistry
2020-08-19
Verified review
They called me back with solution
Indra Jaya
Indra Jaya
2020-08-12
Verified review