{"id":7819,"date":"2023-01-23T12:00:04","date_gmt":"2023-01-23T01:30:04","guid":{"rendered":"https:\/\/adelaideprivatewealth.com.au\/how-to-access-funds-available-from-your-home-loan\/"},"modified":"2023-01-23T12:00:04","modified_gmt":"2023-01-23T01:30:04","slug":"how-to-access-funds-available-from-your-home-loan","status":"publish","type":"post","link":"https:\/\/adelaideprivatewealth.com.au\/how-to-access-funds-available-from-your-home-loan\/","title":{"rendered":"How to access funds available from your home loan"},"content":{"rendered":"
If you need extra cash, you may be able to redraw or borrow against your home loan. Keep reading to find out whether these options are right for you.<\/p>\n
Chances are if you\u2019ve made a habit of paying more than your minimum scheduled repayments, then you\u2019ll have money available for redraw. If you have\u00a0internet banking, you may be able to check what, if any, funds you\u2019ve available to redraw.<\/p>\n
You could use this money to pay for unexpected expenses that pop up or for planned things such as holidays, renovations, school fees or a new car just to name a few. You can\u2019t use your redraw for business purposes however.<\/p>\n
Sometimes fixed rate loans have restrictions. Variable-rate loans are usually more flexible when it comes to redraw. Check with your\u00a0banking specialist\u00a0to see if it\u2019s available with your loan or look at switching if it\u2019s a feature you would like. Keep in mind that redraw is not available for construction loans.<\/p>\n
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The cheapest way to redraw funds is usually online through\u00a0internet banking. But if this isn\u2019t an option for you, check how much it will cost to redraw over the phone with your current lender.<\/p>\n
The amount you can redraw at a time depends on how far ahead you are of your scheduled repayments. There\u2019s usually a minimum and maximum amount you can redraw. It\u2019s important to check how much you have available to redraw before you make any commitments.<\/p>\n
After you redraw funds from your home loan, your loan\u2019s contract still applies, and you need to make your next scheduled repayment by the due date. It\u2019s important to remember that the interest part of your repayments will increase because you are now paying interest on a higher loan amount.<\/p>\n
A redraw facility may be cheaper than using a\u00a0credit card\u00a0or\u00a0personal loan\u00a0as the interest charged on your home loan is usually lower than with other types of credit.<\/p>\n
Before making any commitments, it\u2019s important to check how much you have available, and what your options are.<\/p>\n
The lowdown on home loan top-ups<\/p>\n
The benefits<\/strong><\/p>\n Topping-up (increasing your loan amount) allows you to access the equity accrued in your house. Like a redraw, you can use a top-up for all sorts of expenses. These include:<\/p>\n home improvements<\/p>\n<\/li>\n consolidating debts<\/p>\n<\/li>\n purchasing a new car<\/p>\n<\/li>\n paying for a wedding<\/p>\n<\/li>\n funding your children\u2019s education.<\/p>\n<\/li>\n<\/ul>\n A big benefit of a top-up is that it can be cheaper than other types of borrowing. This is because\u00a0home loans\u00a0generally have lower interest rates than\u00a0personal loans\u00a0or\u00a0credit cards.<\/p>\n Things to keep in mind<\/strong><\/p>\n Opting for a top-up on your loan means that you are increasing your mortgage. This means you\u2019ll need to consider:<\/p>\n how much this will extend the life of your loan<\/p>\n<\/li>\n how much your repayments will increase by<\/p>\n<\/li>\n whether you can budget for this with your other financial commitments.<\/p>\n<\/li>\n<\/ul>\n Finally, the amount you can borrow depends on your personal financial situation, the value of your property, and your bank\u2019s standard lending criteria. For more information, speak to us on [phone].\u00a0<\/p>\n Source: NAB<\/a><\/span><\/p>\n Reproduced with permission of National Australia Bank (\u2018NAB\u2019). This article was originally published at\u00a0https:\/\/www.nab.com.au\/personal\/life-moments\/manage-money\/manage-debt\/home-loan-funds<\/p>\n National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances.<\/p>\n \u00a9 2022 National Australia Bank Limited (\u201cNAB\u201d). All rights reserved.<\/p>\n Important: The post How to access funds available from your home loan<\/a> appeared first on MLC Contemporary<\/a>.<\/p>\n<\/div>\n\n
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