Rivendell Finance can assist with Rivendell Finance can assist with Property Refinancing which is the refinancing of your existing home loan on your acreage properties.
Property refinancing refers to the process of obtaining a new loan or mortgage on a property to replace an existing one. Refinancing is typically done to take advantage of better interest rates, reduce monthly payments, adjust the loan term, or access the equity in a property.
When you refinance a property, you essentially pay off the existing mortgage with the proceeds from the new loan. The new loan terms, such as interest rate, loan duration, and repayment structure, may be different from the original mortgage.
The two most common reasons clients refinance their loans are:
Not happy with current lender (incl customer service), interest rate, repayments and/or fees and
Clients wish to borrow against available equity to undertake home improvements and to consolidate other debts, at the same time as refinancing their home loans.
Where there is additional equity in the property, it is also possible to borrow additional funds for home renovations and improvements, including a new kitchen or bathroom, new carpets, painting, landscaping, a swimming pool or tennis court.
Some examples of Property Refinancing include:
- Refinance of a 1 acre residential home, with additional funds obtained via a “cash out/equity release” for the construction of a swimming pool
- Refinance of a 40Ha acreage property, as the current lender did not offer a competitive rate and the fees were too high
- Refinance of a 50Ha block of land, in preparation for building. In this scenario, by changing lenders, the clients were able to borrow 10% more of their land value and put this towards their construction loan, which made a big difference to their build budget.
- Refinance of a 25-acre acreage property and a $50,000.00 cash out for home upgrades, including the installation of solar panels, new double glazed windows, new heating system, landscaping and fencing and internal/external painting of the home.
- Refinance of a 10-acre acreage property plus a cash-out for $80,000.00 for a new main bathroom, brand new kitchen and appliances, new laundry, internal and external repainting and new carpets
- Refinance of a rural residential investment property with a cash-out for $40,000.00 for updating internal floor coverings, updating the kitchen, landscaping and fencing, which improved the rental yield of the property
Another common strategy involving refinancing is where clients have an existing property in a residential area, for example in Canberra, and would like to purchase an acreage property but retain their existing home as an investment. We have the ability to run the numbers and model retaining the current property as an investment property and borrowing against existing equity can fund the deposit and stamp duty for the new property purchase. In some situations where there is sufficient equity, a client can purchase a new property without spending any cash on the deposit or stamp duty, as this is funded via equity in the existing property. This strategy also means the client doesn’t have to sell a good quality investment property and can have the best of both worlds!
When considering property refinancing, it’s important to assess the costs involved, such as closing costs, application fees, and any prepayment penalties on your existing loan. You should also compare the potential savings or benefits of refinancing against these costs to determine if it’s a financially sound decision.
It’s advisable to consult with mortgage professionals or financial advisors to evaluate your specific situation and determine if refinancing is the right choice for you.
Talk to Alision from Rivendell Rural Finance about your Property Refinancing needs today.
