If you have a property loan, you should consider refinancing your mortgage every now and then. In this article, we will go over the tips of property refinancing.

What you need to know

First and foremost, it is critical to understand why you are refinancing your home. Knowing your goals makes it easy to determine what to compare and what to avoid.

1. Calculate your whole financial savings. Usually as a result of interest rate reductions on your current house loan.

2. Withdraw money for other purposes.

3. Consolidation of debts, such as credit cards, personal loans, overdrafts, and car loans. In comparison to other types of loans and credit facilities, housing or property loans have the lowest interest rates.

4. Adjust the instalment payback schedule to fit your goals and financial situation.

What to be careful of

There are various expenses and risks to consider after you know why you want to refinance your house/property.

1. Terms of your existing loan’s lock-in

• Early termination of your loan may result in early exit fines.
• The penalty usually ranges from 2% to 3.5 percent of the original loan amount.
• There may be clawback expenses if you were on Zero Entry Cost products (e.g., valuation fees, legal fees borne by the bank).
• Start the refinancing application procedure at least four months before the lock-in term ends. The majority of the time, you can get away with no departure penalty.

2. Fees for returning a loan

• Fees paid to lawyers for the paperwork required to redeem a loan (Perfection of charge).

3. Existing MRTA policies will be terminated

• Unless you refinance with the same bank, MRTA policies are usually not transferable to the new loan.
• Insist on cashing out on your existing MRTA policy’s surrender value. The overall redemption amount will be reduced as a result. This is a step that many people overlook.

4. Fees for loan documentation for a new loan

• Use our Home Loan Calculator to find out how much your refinancing legal fees will be.
• You might not get the greatest interest rates or be tied in for a longer length of time. If you want to remortgage with no money down, look into Zero Entry Cost (ZEC) options.

What you need to do

Start looking for the best house loan / commercial property loan packages available after you know your refinancing fees. To do so, use LoanPanda’s Online Mortgage Tool. Use it to figure out how much money you can save.

The interest rate comparisons will be especially beneficial to people wishing to save money and reduce their loans (credit cards, personal loans, overdraft facilities).

Aside from that, the maximum loan tenure as well as other product features such as Flexi, payment holidays, and fixed rates will be especially beneficial to individuals looking to decrease their monthly instalment payments.

Pay attention to the property assessments supplied by banks if you want to cash out for other purposes, such as renovations or other investments.

Choices Other Than Refinancing

If you want to save money, your current bank may be willing to restructure your existing loan with better interest rates, subject to certain requirements. Before you go looking for options, make sure to check with them.

If you want to cash out, your current bank may be able to help with top-up loans. Some people can also get a renovation loan. Inquire with them or apply for a loan through LoanPanda.

A personal loan may be a better alternative if you only need a little amount of money and want to avoid the legal fees associated with refinancing. It is also quicker.

Conclusion

Determine your goals before refinancing. Know the charges and check with your present banks to see if there are any options for restructuring or top-up financing. To compare your alternatives, use LoanPanda’s Home Loan Refinancing Comparison tool. Once you’re satisfied and confident that a mortgage refinance is right for you, submit an application to LoanPanda for the quickest and most accurate results.

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