The risks and benefits of refinancing our home loan

Know the pros and cons of refinancing so we benefit from a good switch

Regardless of whether we are thinking about refinancing to get a better interest rate or as a way to consolidate our debts, refinancing can be quite costly and may end up costing us more in the long run, so it pays to be informed.

Refinancing would not suit every borrower, so by reading the list below, we make the best decision when considering whether or not to make a switch.

The benefits of refinancing of housing loan

Access equity

 One of the benefits of refinancing is having the chance to access equity we have collected in our home loan. This can then be used for things like renovations, investing, purchasing a new car, taking a holiday, or any other pursuit we may be able to think of.

Get a better rate

 Another benefit of refinancing your home loan is to get a better interest rate so our repayments will be lower. If we know we qualify for a low rate this could potentially save us a lot of money. This is one of the biggest benefits of refinancing.

Increase the length of our mortgage

This can reduce our repayments by spreading them out across a longer period of time. This may not be the best solution if we are having trouble making payments. Try to seek the advice of a professional financial counselor who can help us get out of our repayment rut, as over time we will spend a lot more in interest if we opt for this strategy.

Shorten the length of our mortgage

 Refinancing can also do the opposite of the aforementioned benefit and shorten the length of our mortgage. This will lower the amount of money we spend on interest in the long run but increases our repayments. This allows us to pay off the loan faster and gets us out of debt quicker.


 By choosing to refinance our home loan we may also be able to switch to a fixed rate loan. This will allow us to benefit from the protection of a locked interest rate which will stay the same for the entire life of the loan and protect us from fluctuations in the market. If we currently have a variable rate home loan refinancing to a fixed rate might benefit us.

Pay less in fees

 Refinancing our home loan can also help lower the amount of money we spend on fees. Our current home loan may have built in fees for additional features like offset accounts or redraw accounts. If we refinance we might be able to drop these features or eliminate the fees for them.

The risks of refinancing

Lenders mortgage insurance

 One of the risks of refinancing our home loan is that we may need to pay lender’s mortgage insurance (LMI) to our new lender, even if we have already paid it. This is usually only true if we have a loan-to-value ratio (LVR) that is above 80 percent, which basically means you have less than 20% equity in our property. LMI can be expensive, so this may undercut the savings we receive from refinancing.


There may also be exit fees that we will have to pay out of pocket, too. These are fees that we may be charged for exiting out of our loan early and if we have a fixed rate home loan, these can be quite high. There may also be upfront fees for our new loan as well. In addition to exit fees, there are also upfront fees charged by our new lenders, such as application fees and valuation fees.

Longer loan duration

 Refinancing may also lock us into our home for longer than we planned on staying. If we had hopes of moving soon, refinancing our home loan could hurt our efforts. If we move too soon the monthly savings we gained may not have been worth the overall cost of refinancing. To read more about hdb conveyance lawyer check here.

Home-Based Business Vs Franchise Business – A Side-By-Side Comparison For Success

There are many popular franchise business opportunities that are available to those looking to run their own business. They provide a viable, proven system to produce income with a product that is highly-advertised and purchased by the vast majority of society.

But one question you want to ask yourself is this: At what cost does success come with a franchise business opportunity?

The two biggest models available to a brand-new entrepreneur are franchises and network marketing opportunities. This article weighs the pros and cons of starting a franchise business and a home-based network marketing business and will help you decide which model works best for you.

1. Cost – This is a very important element and should be considered very early in your search for a new business, regardless of franchise or home-based. Most franchises cost thousands of dollars just to invest. Once you’ve invested, you have lots of overhead to consider, such as personnel, health benefits, inventory, marketing, advertising, and more. This will inevitably lead you to reach into your pockets for more, thus putting you further in the red before you even think about opening your doors.

With network marketing, your start-up costs are significantly lower and relative to the company you join. Your overhead is also lower, as you don’t need to worry about hiring personnel, paying for health benefits, and in some cases, house boxes of inventory. If you decide this is a more viable route for your start-up budget, you want to be sure you expose yourself to the knowledge needed to market your business and product. Remember that your product won’t promote itself, and neither will your opportunity. So be sure your company provides marketing training. If they don’t, reserve a specific amount of your start-up capital for marketing courses and training.

2. Time – This is extremely important to evaluate because most entrepreneurs are looking to leverage time in their favor by starting their own business. If you value your time, this is as much of a cost as your initial investment. If you’ve left ‘Corporate America’ schedule behind and are looking for a way to earn a steady stream of income on your own watch, a franchise business opportunity may not be the best direction to go. Until you get your business off the ground and have the revenue available to hire a staff, you are working from the second you open the door to the second you close, every single day. This can create more time imprisonment than an actual “9 to 5″ job.

When you pit this against a network marketing business on the basis of time, network marketing will win every time. By starting a home-based network marketing business, you are still a business owner, but you are not confined to a corporate schedule that tells you when you have to be open. If you need to take an afternoon off, you have that luxury available to you. The important thing to keep in mind is you are 100% accountable for all of your output. You want to be sure you’re putting in the necessary effort to ensure your business survives and thrives. The good news is you are able to do this at your convenience. And if you don’t want to quit your day job right away, you can choose to work your business part-time.

3. Length of time to turn a profit – In a franchise business, it can take anywhere from 2-5 years to recoup all of your initial investment. Also, keep your ‘time’ investment in mind as well. The amount of hours you spend trying to get out of the red can weigh tremendously on your psyche. Before making the investment, you want to make sure you are capable of going a lengthy amount of time before you see positive fiscal results.

Contrarily, a network marketing business gives you the opportunity to turn a profit in a much quicker fashion. This is possible simply because your initial investment for starting your business is drastically lower. The thousands and thousands spent to start a franchise is normally reduced to hundreds when it comes to a home-based business. Most network marketing companies charge a small start-up fee and a monthly charge that provides the business owner with back-office assistance and several other key factors to running their business. If you market your business properly right from the start, you set yourself up for a much faster return on investment by taking the network marketing path.

To conclude, no one model is the right way to go. Both franchise business and network marketing opportunities have proven to be successful over the years. It boils down to which level of investment you’re willing to make, how much time you’re willing to commit to your business’s success, and how long you’re willing to wait for a return on your investment. Regardless of which direction you decide to go, the same basic principle applies: Expect to get out your business what you put into it.

Find Business Mentors

Starting in any business can be tough and no matter what you do you will always have problems that pop up. These can become quite big issues if you don’t handle them properly and professionally. So, where do you learn about these problems and how to overcome them? Well, finding business mentors is one such way of remaining calm.

These business mentors can help you with any aspects of your business that you are struggling with. Here is how they can assist you to make your business run smoothly and how you can find them.

First of all, a business mentor is someone who has had a business or who still has a business in the same field that you are in. This does not have to be exactly the same, but the closer to the line of work you do the better it will be. Find a business mentor who you admire and who you look up to in terms of how a business is run. You can find these kinds of people by looking on your community, or even learning about the big wigs in the industry who you can contact.

Finding the best business mentor for you will depend largely on how you work with other people and about how well you can take criticism. Now, let’s assume that you have gone into a retail industry and opened a clothing business. You can use business mentors in the textiles industry including designers, fashion houses, or large department store managers. These people can give you hints about how to best run your business.

These business mentors will show you the problems that they face, how they cope and what could be changed to make their business better. Finding a good business mentor will be someone who has the time and patience to teach you well and allow you to come into the business and see how everything works from the inside. Granted, some CEO types are far too busy to mentor a newbie, but getting hold of someone as high up in the business as possible will be the most beneficial.

The best place to find business mentors is in local towns. Your small store or business around the corner will be the best place to start, because they will have a working business model to show you, you can probably get first hand advice from the owner themselves, and you will learn more about ever part of running a company. You will probably start out as a small company, so it makes sense to get business mentors from smaller companies to help you.< async="" src="//">

So, when you want to find business mentors to give you advice and help you when you want to start your own business, you should start closest to you and look for highly successful business where you live. As long as you get the attention and tutoring you need, you can start your business in no time and make sure that it is a success.