Refinancing your mortgage is something you should re-visit every once in awhile if you have a property loan. In this article, we explore the basics of property refinancing and some tricks from the experts.
Firstly, before undertaking a refinancing, it is important to know why you are doing it. Knowing your objectives makes it easier to know what to compare and what to watch out for. It usually falls within these 4 categories:
Once you know why you want to refinance your house / property, there are potential costs and pitfalls to consider.
After you know your refinancing costs, start looking around for the best home loan / commercial property loan packages available.
The interest rate comparisons will be especially useful for those seeking monetary savings and those looking to consolidate their debts (credit cards, personal loans, overdraft facilities).
Aside from that, the maximum loan tenure and other product features e.g. flexi, payment holidays, fixed rates will be especially useful for those seeking to reduce their monthly installment commitments.
if you are looking to cash out for other usages e.g. renovations, other investments, pay attention to the property valuations offered by banks.
If you are looking for monetary savings, your existing bank may be open to restructuring your existing loan with better interest rates, subject to conditions. Check with them before you go hunting.
If you are looking to cash out, your existing bank may be able to offer Top Up Loans. Some also have what is known as a Renovation Loan.
If you only want a small amount of cash, a Personal Loan may be a better option to avoid all the legal fees involved in refinancing. It is also faster.
By refinancing from Conventional to Islamic packages, you can enjoy 100% stamp duty waiver on the existing loan balance. Factor this into your decisions.
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