So what exactly is refinancing and how can it benefit you? Home refinancing is one of the most effective ways to access equity. Simply put, you can release cash based on the value of your properties, which can be used to reduce monthly expenditure (cover shortfalls) in other properties, or even be put towards a deposit for further investment properties.
People are looking for ways to reduce regular expenses and free up more disposable income each month. Saving money to pay a deposit for another investment property can be a long, seemingly endless process. One of the most effective ways to access the kind of sums of money needed, to pay a deposit on a big-ticket item like property, is to refinance an existing property.
When the process is managed efficiently by home refinancing experts, particularly refinancing an existing property can prove to be one of the most intelligent financial decisions a homeowner can make.
How does it work?
The key to refinance is the fact that property increases in value over time. This means that if you’ve owned a property for a number of years, chances are it is worth more than it was when you bought it. So refinancing this property means securing a new mortgage for your property based upon its current, increase, value and not on the amount it was valued at when you took out the initial mortgage loan.
Why should I do it?
By refinancing your property based on its current value, you access the equity accumulated in your property. It is still credit being extended by your lender and so you will pay interest on it. However, if you use this money to finance further investment by buying another investment property for example, which you then go on to rent to tenants and use the money generated by that rental to pay the monthly expenses for the property, rather than taking on more debt that would place you and your family under financial strain, you are helping to ensure a financially secure future for you and your family.
Our mortgage brokers are experts in this field and their goal is to find the best mortgage option to suit your needs.
Original article: www.igrow.co.za