Thursday 23 May 2024
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7 easy steps to refinance the home mortgage

7 easy steps to refinance the home mortgage

There are many people, who are eager to know as to home loan Philippines can be refinanced. Probably, the person might opt for refinancing for cashing out the equity. He may also want to refinance for taking benefit of the low rate of interest that is prevalent amongst most reputed financial institutions in the country or simply to change to fixed rate from variable rate. He also could be interested to shorten or lengthen the repayment time to suit his specific needs.

refinance home mortgage

Few instructions to be followed to determine if refinance is a good option to be availed or to avoid

  • The current statement of mortgage can help to know about pay off on the note. In case, it is the amount to be borrowed, then he can know as to what needs to be included within the new budget for the purpose of refinancing. Average interest rate in the country is around 7-10 percent.
  • If home mortgage is present in the Philippines, then a penalty could be charged for early payment. The mortgage papers are to be scrutinized for checking out if a penalty is applicable or not. If a penalty is present, then the lender is to be enquired about the amount. As most of the mortgages are between 1 and 10 year period, with penalty, refinance might not prove to be a good option.
  • The lender is to be told about the requirement of a home mortgage refinance application. Reason is to be cited for availing this option. The fees to be charged are to be found out. Registration fees, transfer tax and documentary tax are not charged in the Philippines. They are actually one time charges, which are paid on the initial mortgage, however, are expensive. Hence, refinancing would mean, the person does not have pay again.

statement of mortgage

  • The quotes received from the different lenders are to be compared, to check as to who has been offering the lowest possible interest rate and hence, smaller payments. BDO home loan can be a wonderful option for refinancing purpose.
  • Another important and essential thing that is not to be neglected is to check and compare the terms and charges that are associated with refinance quotes that are received from the lenders. The pros and cons of each of them are to be listed down properly and carefully. A lender is to be picked up, who can offer huge benefits and an application form also is to be sought. The form is to be read carefully, thoroughly and accurately filled out and returned back to the lender.
  • The relevant documentation is to be included as desired by the lender along with the applicable fees and the application. In case, existing mortgage lender is not availed, then a new appraisal can be requested for on the home from the new lender.

relevant documentation

  • The documents and the application that is submitted by the lender are likely to be evaluated and verified. On being approved the loan, a document package would be sent by the lender for the applicant’s signature. Without understanding them clearly and thoroughly, it is not to be signed.

Following the above can help the person to refinance his existing mortgage.