Refinancing your home loan to access equity

Achieve your property goals sooner by refinancing to access equity

Your home equity could be used for a wide range of purposes, such as improving and renovating your home or even going on a dream holiday. Let’s take a look at how refinancing could help you achieve your financial goals.

Use your equity to go on a holiday

Believe it or not, refinancing could be the key to helping you go on that dream holiday. As a result of refinancing their home loan, some borrowers are able to travel around the world, or simply take a break with the kids locally.

It’s important to put a plan in place to repay any additional debt you may accrue from any holidays you take. This is because once this cost is added to your mortgage, it can increase your interest charges and repayments. With this in mind, it’s a good idea to only borrow the amount that you need for the trip.

Access equity to buy a car

If you are considering a new car but you’re not sure how to finance it, refinancing your home loan could be an option. Before jumping in headfirst, there are a few aspects to carefully think about.

Adding the cost of a car to your home loan can mean that this amount is paid back over the full term of your home loan. For example, interest paid on the amount added to your long term home loan from a new car could be much more than the interest paid on a car loan over a shorter term. Let your FND Broker crunch the numbers to make sure it’s the right option for you.

Refinancing to fund home improvements or renovations

Refinancing through either a line of credit loan or a construction loan is a common way to raise funds for a renovation budget.

Otherwise, you could 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 and investing

Buying an investment property may be a good strategy for accessing rental return and potential capital gain. However, for many, saving to buy a property while already paying off a mortgage may be challenging.

By refinancing your existing home loan, you can gain access to your home equity. You could then use this equity as a deposit to purchase another property to use as an investment. It’s a good idea to access property suburb reports and speak to an expert to ensure refinancing to invest is the right decision for you.

Refinancing could be the way to reach your goal! Speak with your FND Broker to find out if it’s for you.

You might also be interested in: Using equity to buy a second home or investment property