Refinance Your Home Loan To Enjoy Great Savings
Refinancing home loan means taking a new home loan to pay off your current mortgage. It is an opportunity to replace your existing home loan with a new one that may be a better fit for you.
Why Do People Choose To Refinance Their Home Loan?
Cost Considerations For Refinancing Home Loan
Depending on the terms and conditions of your existing home mortgage, you should consider the following:
- Redemption costs: When you refinance your home loan with another bank, you need to check whether are you still within the lock-in period. If you are, you may have to pay back the subsidy or incur prepayment penalties.
- Conveyance fee: To complete your refinance, you will need to hire a lawyer to complete the refinance.
- Valuation fee: When you refinance your home loan, the bank will hire a valuer to value your property.
In some cases, the banks may offer a subsidy to help offset the cost. It usually makes financial sense to refinance if you can get an interest rate that is lower than the interest rate you are currently paying.
What Are The Issues You Should Consider For Refinance Home Loan?
You may wish to consider the following issues to determine whether it is now the right time to refinance your home loan:
- What is the remaining loan tenure on the existing home loan?
- When is the current home loan lock-in period end?
- How long do you plan to reside in this property?
- How long do you hold this property as an investment?
- How much lower will be the monthly instalments if you refinance your home loan?
- Are there any upfront payments for refinancing?
- What is the current value of the property?