Many parts of Australia have had falls in property prices in the past few years.
That can be a problem for borrowers who may be looking to refinance their loan. A fall in the value of the property could make it impossible to get new finance. Any new lender will see the house is no longer worth what was paid for it originally and will be loath to pay out.
The mortgage experts say there are two approaches borrowers can adopt in those circumstances.
They can remain with their existing lender and try and wangle a better deal from them. Or, if you have spare cash, you may try and pay down the principal on the loan. As your equity in the home rises, you become a better potential client for other lenders who may then decide to refinance your mortgage.
Source: The Age
