There are many reasons to refinance your home and to not. What factors should you consider before refinancing your home?

Refinancing your home could be a good thing to do if you’re planning to stay on that particular property for some time. Mortgage refinancing could bring several benefits, which includes lowering your interest rates, making you save thousands of Ringgit. Before you start, read 4 reasons not to refinance mortgages first.

Mortgage refinancing (in property terms) help you:

1. Lower interest rates and save you thousands of Ringgit

This could mean lower monthly payments, quick payment to the capital and so forth.

2. Extend Repayment Time

Building home equity quickly, due to the fact that more payment will go to the principal rather than the interest.

3. BLR Increase Protection

Certain home loan packages offer BLR increase protection for an agreed period of the refinancing term. BLR increase usually sums from 0.50% to 2.00%. See Malaysia BLR 2010.

4. Cash out Refinancing

Access to extra cash. After refinancing your current principal balance, you can take these extra cash out as money, literally – To pay for many other things.

Refinancing mortgages works best when interest rates are low. Interest rates vary according to the Malaysian economy, so be wary of these changes before you make the decision to refinance. In these contexts, we’re talking about Property.

First question you need to ask yourself, “Is there enough equity in the property?” What makes refinancing worth it if you’re refinancing more than 90% of your loan? Homeowners usually want to quickly pay the principal off rather than just servicing interest rates – And that’s the key idea to repayment of debts, especially when it comes to your biggest purchase made in your entire life – Your Malaysian Property. Most importantly, you need to look at yourself.

If you have bad credit history (unpaid credit card bills, telephone bills, uncleared debts, etc). If you cannot maintain a good relationship between your income and debt, then it’s not worth refinancing, because everything will sum up to MORE debts.

Mortgage Refinancing: Being Aware of Tricky Financial Disputes

Are you a borrower and need to find a lender? Here we are: We offer best refinancing interest rates tailored to suit your income level: Nonconforming interest rates. Be cautious about this. Even people with good credit history may make a mistake here if they do not weigh all possibilities.

1. Too long of a loan tenure – Stretching repayment to a longer period.
2. Almost cleared your debt – If you’ve completed paying for 20 years in a 30-year period, refinancing will only make things worse – Instead of 10 more years to go, you’re taking another 30 years with an unstable interest rate count.
3. Extra payment for insurance – If you borrow more than 80% of your home value, you’d need a mortgage insurance. Refinancing will only make you pay extra since mortgage insurance is in your debt now.

The mortgage and financial consulting services are offered to you FREE of charge without any obligations. Kindly contact us or email to consultant@malaysialoan.com.my if you need any enquiry. Thank You.

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