Home Loan Refinancing

Published on August 13th, 2015

If you own a home, the thought of refinancing may seem daunting, but it may be the perfect opportunity for you. Essentially, refinancing just means replacing your existing home loan with a new one that consists of different terms and conditions. While there are plenty of benefits, it is important to take into consideration a couple of things. One is the moving cost of initiating a refinance. Things such as legal fees and disbursement are fees that come with a refinance. Some banks do offer a zero-cost moving deal, but it often comes at a higher refinancing cost, so it is important to compare costs. The other cost is a lock-in period. By refinancing, you often must commit to a certain amount of time where you are not allowed to refinance again, unless you want to pay a large fine. Therefore, make sure when refinancing you are at the best bank for your needs and that you do not plan on moving within the lock-in period.

Despite these two considerations, the benefits are rather great. One big benefit is that you end up paying less interest on many home loan refinancing packages. If you are planning on staying in your home for a long time and want a lower monthly payment, you can refinance to make your loan payment last for a longer period of time, which effectively lowers your monthly payment. In addition, if your home has increased in value you can refinance to help pay off your loan, freeing up more cash in having lower monthly payments.

If you are considering refinancing your home, know that research and information will be your best friend. Look into the offerings at banks near you and approach the banks you are interested in. Remember that you are definitely in a position to negotiate the terms and conditions if you would like anything different as to what they offer. Home refinancing can create a greater cash flow for you, which is always a good thing!

Courtesy of: Visual

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