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Refinancing Tips:
How to Use the Equity in Your Home

Angelo Malizis | 25 November 2014




Home loan refinancing


Home equity refers to the difference between

what your home is worth and how much you owe on it

For example, if your house is worth $350,000 and you owe $200,000, you have $150,000 in equity.

Gaining access to the equity you currently have tied up in your home, through refinancing your home loan, can be a great way to raise the money you need to purchase an investment property, carry out necessary home renovation projects or pay off credit card bills.

Let's look at refinancing and how you can use your home equity in more detail…

What is refinancing?

To put it simply, refinancing is when you take out a new home loan (usually one with a better rate of interest), and you use some or all of the funds to pay off your existing home loan.

The main reason people refinance their home loan is to save money by gaining access to a better rate of interest. The benefits of being able to access the equity in your home through refinancing include:

1. Raise some cash for home renovations and improvements

Is your home in need of a new kitchen, a new bathroom, or maybe your family is outgrowing your current living space. Renovating your house is not only a great way to improve your living space, but it can also increase the value of your home. However, to do it right can be costly.

If you need to increase finance to fund a home renovation project then you may want to consider refinancing your home loan.

2. Pay off your debts by consolidating them into your home loan

If you have outstanding debts that you are struggling to pay off, then refinancing your home loan allows you to consolidate all your repayments into one simple monthly repayment - often at a lower interest rate. You can then really start to chip away at repaying your debt by paying less interest every month.

3. Free up some cash to make a big purchase

There are certain times in life when you need access to some extra cash. If your car breaks down and you find yourself unable to get to work – what would you do? Alternatively, you may decide that 2015 is the year for your dream wedding and you need an extra cash boost to make it happen. Whatever the reason, refinancing can be a way of releasing some of the money tied up in your house for you to put to good use today.

4. Buy an investment property

If securing an investment property and planning for the future is something that's been on your list of life goals, then refinancing could be a way of raising the cash you need to put down a deposit on a property, or even buy a new property outright. With rising house prices and competitive interest rates, refinancing can be a cheaper way of gaining access to the finances you need to help you achieve your investment goals.

Even though releasing equity in your home may be suitable for some people, it is important to remember that this is a long-term commitment.





Angelo Malizis - CEO of resi home loans
Angelo Malizis is the CEO of resi home loans. He has over 30 years of experience in the financial service industry. If you wish to learn more information on refinancing your home loan and what options to choose from, check out resi's guide on mortgage and home loan refinancing





Tell us about your home loan refinancing experiences....
Make a comment below!




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What does it mean to be a single mum?Of course, the

kids

are the most important thing in a single mum's life. Kids are the focus and always have been. But along with the children, there are other matters that can confuse a single mum's life.

Centrelink

plays a big part of a single mother's life, mainly because this is where a large percentage of single mums get their finances from. Centrelink are the source from where the

single mother pension

, or as it is otherwise known, the single parent payment comes from. The single mother pension is a subsistence amount, but just the same, it is money to live on, and so it is important, no matter if it is called single parent payment, single mother pension or whatever Centrelink welfare classes it at the time

Often, single mums come out of a

divorce

or defacto relationship only to find that their troubles have just begun, and find that their first step leads them towards Family Law - it's time to engage a lawyer.
There are more than just Centrelink finance problems to worry about, as mentioned before, but also

child custody

issues. Child custody is something that hits right at the heart of

single mums

. If a single mother's ex husband or ex partner has been a domestic violence perpetrator, the mum may be greatly worried about child custody. They worry that their kids won't be safe with their spouse, who has already proven to be abusive because they caused

domestic violence

, which resulted in a divorce or separation.

Even so,

Family Court

will often still order a form of child custody named

Shared Parenting

. Shared Parenting is a form of child custody division of time or parental responsibility between the parents. Mother's often look for a good divorce lawyer to try to avoid share parenting with an abusive ex-spouse after divorce, however in many cases Shared Parenting is still the outcome after the divorce, no matter how good the divorce lawyers have been. They will often settle for visitation at a contact centre or access centre where fathers or mothers are supervised during child custody access.

Please remember the bigger font words,because we will use it often in our website.