several reasons to refinance your home:
> To lower the interest rate on your mortgage and reducing your monthly
> To reduce the term or length of your loan, doing so can save you thousands
of dollars in interest;
> To provide a means of consolidating your debt.
All of these are excellent reasons to pursue refinancing, but several issues
should be considered first.
Refinancing is similar to the process you encountered when you closed on
your first mortgage. It requires an application, credit check, new survey
and title search, as well as
valuation and inspection
fees. As you know, this process can be quite lengthy and
expensive if banks doesn't absorb the cost. Do check around in our
Malaysia Home Loans page for more information.
As a rule of thumb, it pays to refinance if you can get an interest rate at
least 1 percentage points lower than what you are currently paying. However,
every situation is different. Some banks are offering attractive package and
some don't. Asking yourself a few questions may help you determine if you
can save money:
How much can
I lower my current monthly payment?
How long do I
plan to stay in the house after I refinance?
How much will
I pay in refinancing costs*?
out what you still owe on the house, how much you're paying each month, and
how much you initially paid for the house. Itemize all the expenses of the
refinance and estimate your new monthly payments. With this, you can figure
out where you break even and when you begin saving money.
* Most of the banks does offer
zero moving cost (bank will bear the legal processing fees) for refinance
if your loan is above $100,000. Do check around in
Loans page for more information.