As a plasterer, your financial situation might look different from the average homeowner. Whether you're self-employed, working as a contractor, or running your own plastering business, refinancing your home loan could be one of the smartest financial moves you make.
Let's talk about what mortgage refinancing really means and how it could benefit your unique circumstances as a tradie.
What Is Mortgage Refinancing?
Refinancing means replacing your current home loan with a new one, often from a different lender. Think of it as switching from one loan to another, usually to get more favourable terms. This process involves paying out your existing loan and taking on a new one with different conditions.
Many plasterers consider refinancing when their fixed rate period ending approaches, or when their financial situation changes. The application process involves providing updated bank statements and documentation about your income, which Finance & Mortgage Brokers can help streamline for tradies.
Why Plasterers Should Consider Refinancing
Your income as a plasterer might fluctuate seasonally, or you might have built up significant equity in your property over the years. Here are the main reasons why refinancing could work in your favour:
Accessing a lower interest rate is often the primary motivation. Even a small reduction in your interest rate can save you thousands over the loan term. With access loan options from banks and lenders across Australia, mortgage brokers can help you find more competitive rates than you might discover on your own.
Releasing equity in your property becomes particularly valuable when you want to expand your plastering business, purchase new equipment, or invest in additional properties. If your property has increased in value since you bought it, refinancing can help you access this equity.
Change your loan term to suit your current circumstances. Maybe you want to pay off your loan faster now that your plastering business is doing well, or perhaps you need to extend the term to reduce loan repayments during quieter periods.
Key Benefits for Your Financial Situation
Refinancing offers several practical advantages that align with the realities of working in the trades:
- Debt consolidation opportunities - Combine multiple debts into your home loan at a lower interest rate
- Access to better loan options - Lenders now offer more tradie-friendly products than when you first bought
- Improved loan features - Offset accounts, redraw facilities, and flexible repayment options
- Release equity to buy the next property - Whether for investment or upgrading your family home
Understanding Interest Rate Options
When refinancing, you'll need to choose between variable interest rate and fixed interest rate options, or a combination of both. Each has its advantages:
Variable rates typically start lower and can decrease if market rates fall, giving you the potential for reduced repayments. However, they can also increase, affecting your loan amount repayments.
Fixed rates provide certainty for your budgeting, which can be particularly valuable if your plastering income varies throughout the year. You'll know exactly what your repayments will be during the fixed period.
The Refinancing Process for Tradies
The application process for plasterers involves some specific considerations. Lenders want to see consistent income, which can be challenging when you're self-employed or contracting. This is where working with mortgage brokers who understand the trades industry becomes invaluable.
You'll need to provide:
- Recent bank statements showing your income patterns
- Tax returns and financial statements
- Details about your current loan amount and property value
- Information about any other debts or financial commitments
Mortgage brokers can check eligibility for special lender policies designed specifically for tradies, potentially opening up options you wouldn't have access to directly.
Making the Right Choice for Your Circumstances
Refinance interest rates vary significantly between lenders, and what works for one plasterer might not suit another. Your decision should consider:
- How long you plan to stay in your current property
- Your current and projected income stability
- Whether you want to access equity for business or investment purposes
- The costs involved in refinancing versus the potential savings
The streamlined application process available through experienced mortgage brokers can make refinancing more manageable, particularly when you're busy with plastering projects and don't have time to research every lender's requirements.
When Refinancing Makes Sense
Consider refinancing if you're experiencing any of these situations:
- Your current rate is significantly higher than what's available in the market
- You need to consolidate debts to improve your cash flow
- Your property value has increased substantially since you bought
- You want to renovate, expand your business, or make other investments
- Your current lender's service or loan features no longer meet your needs
Refinancing isn't always the right choice, but for many plasterers, it offers a pathway to improved financial flexibility and significant long-term savings.
Call one of our team or book an appointment at a time that works for you to discuss whether refinancing could benefit your specific situation as a plasterer.
