Remortgaging Tips For Better Interest Rates

By on May 15, 2017

Remortgaging your 1st and 2nd mortgages together can benefit you by lowering your monthly payments and most likely give you an overall lower interest rate. That is a very good reason by itself why you should take a serious look at it as a home owner.

Needless to say, it will also save you on hard cash processing fees and charges since you are taking up 1 instead of 2 loans.

A key thing that you should do while looking at restructuring deals are the rates and terms. You should also try to get a repayment schedule to better fit your current financial situation.

If you need a lower monthly payment, get a longer duration. And if you want to make a faster repayment by making bigger monthly payment, try for a shorter duration.

Combining 2 loans into 1 can be said to be good financial advice.

Lending companies has a preference for financing one combined loan rather than two separate loans. That is why 2nd mortgages always costs more than the initial interest rates.

But at times when interest rates crash, you could be looking at lower rates instead.

Remortgaging 2 home loans into 1 will most likely get you a lower interest rate. Since lenders charge flat processing fees, you spend less by going through the process only once. There are a few more hidden closing costs which you will learn about when closing is imminent.

New remortgaging deals will also be very likely to have different terms too. It is therefore a good time to review those terms and decide what would best meet your financial constraints.

Many times, property owners who want to refinance their properties do it for lower monthly repayments. If that is your concern, a good strategy is to obtain a longer term.

Although this increases your total interest costs, it can give you room to breathe in your current personal financial position. But do consider making principal payments to the lender to offset the accumulated interest costs when you have extra cash on hand.

Although it is financially beneficial to combine your 2 mortgages with 1 remortgage, note that there are also some conditions that you may want to keep them separate.

Some times refinancing them separately can give you better overall best interest rates. This can sometimes happen when your total loan principal equates to more than 80% of your home’s fair market value.

If you are considering cashing out part of your home’s equity with home equity loans while refinancing, you should also consider refinancing your 2nd mortgage separately. Cash out refi loans will supercharge your the interest rate which you will pay.

To uncover the best deals in the market, request for quotations from at least a few loan lenders that provides sound remortgaging advice.

Go for at least 3.

This will give you an indication of the current going market rates.

You may even be offered very good counter offers from competing loan lenders. Essentially all monies are the same and you don’t want to pay more when a similar product is available just down the same street.

Why would you want to to get a property loan refinance?

There can be many advantages and drawbacks to this. But the primary reason to get a property mortgage loan refinanced is to reduce the current interest rate on your current loan.

If your existing mortgage rate is 7% and the current rate is 6%, then you might want to consider refinancing to save some hard earned money. It won’t make sense to refinance your loan if the current rates are higher than your existing interest rate.

Unless you are refinancing your mortgage to get a lower monthly payment, restructuring at a higher interest rate will not make sense. You might want to extend the tenure to obtain a lower monthly payment.

In a simplified example on benefits for a refinancing,

If you have an existing loan with 20 years tenure remaining and you are servicing $3000/month. Replacing your current mortgage with one at 25 years tenure and servicing $2200/month will save you a total of $60,000.

You will not only be servicing a lower installment payment each month, you will also save a substantial amount on a house.

Having all the work that you have to do every day, it can be very time consuming to obtain and compare interest rates of various lenders in order to uncover the best.

This happens to be one big reason why you might just settle for the first lender that you see, rather than weighing up your options from lenders and banks that you have obtained.

The main reason for you to compare the latest loan rates offered by different lenders is that you can always find a better deal.

There are no shortage of lenders who are willing to lend their money to you with interest in return, especially when there is real estate pledged as a collateral. Since the terms of each lender varies, you can evaluate which one would suit your personal situation best.

Sometimes ARM can be a better deal. While sometimes fixed are better. Weight up your options and priorities before choosing which type to take up

If you happen to compare mortgage loan rates online, there’s a high chance that you will get good rates as well.

It is not only the website of the lender that can offer great packages but even their mortgage brokers who serve as their online middlemen at the same time.

Therefore, if you would do the comparison at these sites and get their offers as well, there is a good chance that you would get discounts on on top of the best deals. You will sometimes even find that discounts can reach a significant percentage.

There are many ways to go about this daunting task. You can always call the mortgage lender of financial institution yourself and ask for the lowest promotions.

But for faster comparison, you can always rely on the online world to do this job for you. Mortgage brokers can now compare as much as five quotes from the providers of your choice and it will be sent to your e-mail for easy viewing.



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