mortgage Refinancing - Paying off a mortgage and you will end fixation period ? Are you worried about the disproportionate increase in the monthly mortgage payment ? Your bank offered a much higher interest rate than the one currently on the market? Hint as to maintain in such a situation and how to defend against the behavior of the bank .
What is mortgage refinancing ?
Home Refinancing mortgage is a loan (in this case mortgages) another loan . Thus we can say that mortgage refinancing is actually processing a new loan , usually a mortgage (usually at another bank ) , and this new mortgage is “old ” mortgage paid off.
Why refinance your mortgage?
1 ) to ensure the most favorable terms of repayment
In general we can say that mortgage refinancing is beneficial if through a new mortgage if you get more favorable terms than the current mortgage (usually will therefore try to optimize monthly installment ) . Currently, this definition would slightly rearranged . Refinacovat mortgage is paid through a new mortgage loan, you receive a better deal than new condition will be from your bank. It might sound a bit awkward , but due to the development of the market (in 2005, you could conclude a mortgage with an interest rate below 3 %) now certainly will not get better conditions than ending fixation of mortgage you have.
With the increase in the appraised value of the property when refinancing you can get eg from 100 % mortgage on a mortgage up to 70 % , thereby reducing the interest rate.
2 ) an increase in mortgage
Thanks to the partial repayment, higher than the value of the property at the time when you are asked for a mortgage or a better market conditions , it is possible to increase the existing mortgage and take advantage of free resources such as renovation, buying a new property or use the money misappropriated need to buy a new car .
3 ) reduction in monthly installments
Because in recent years have increased interest rates , increased the monthly mortgage payment. With refinancing is an option to extend the maturity date and so reduce the monthly mortgage payment .
Where or why refinance mortgage refinance with another bank ?
- Banks offering discounted mortgages for new customers (basically all the published rate is valid for new clients). When changing fixation increased bank interest rate to 1% compared to current actual rate for a new client . It sounds incredible , but it’s a fact.
In this case, you have 2 options:
1 ) had to go to another bank
2 ) the bank in time to reach a bargain
When a mortgage refinance ?
Generally, the mortgage can refinance only when you end up fixing . Theoretically, you could consider refinancing at any time , but due to the penalties for early repayment at most banks will probably pay off.
The exception is the bank mortgage where you pay no penalty for early repayment. that refinance mortgage you pay at a time when the mortgage market on more favorable terms than you have in the contract.
Why you can bank refinancing offer better terms?
Bank client gets proven that someone has already repaid regularly and thus eliminates the risk that is normally reflected in the interest rate . Ie . the risk that bank margins may be lower and the bank if this ” discount ” reflected in interest rates or forgiving as to charge or both.
How to choose the best conditions for mortgage refinancing ?
Use our mortgage comparison tool . Daily updated interest rates and conditions of bank guarantee you a fresh overview of the current offer of mortgage market .
In the tool, select your mortgage , enter the desired length and fixation product - mortgage refinancing .
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