01 April 2020
There are lots of benefits to refinancing your home if you understand the terms of the loan and know a little bit about your future financial outlook. Simply put, refinancing is adjusting the terms of your home loan. You can adjust your home loan to pay more per month so that the life of your loan is shortened.
Or you can adjust your home loan to pay less per month so that the life of your loan is lengthened. Both can be advantageous if used properly, and both can be hazardous if used recklessly. This article is designed to give you the information you need in order to make the decision about what's best for your financial future.
Refinancing generally makes sense if you can lower your monthly payment by enough to cover the associated settlement charges before selling your home or paying off the loan.
Refinance to lower your interest rate
Interest rates are up and down, if your home is now financed at a higher interest rate, it may be a great time for you to consider refinancing. You could literally save tons of monies just by taking the time to fill out the necessary paperwork and gather the needed documents.
Refinance to lower your payment
Refinancing your home loan at a lower interest
rate could mean drastically reducing your repayment and saving tens of thousands
of ringgit in interest. Lowering your home loan payment could also free up
hundreds of ringgit per month that could be saved or invested. Although
refinancing to lower your payment could increase the term of your loan, it could
make sense in your particular situation.
Refinance to cash out home equity
It’s a tempting proposition to cash out your home equity by refinancing your home. It could even be a great financial move in some circumstances. For instance, it may make sense to cash out some of your home equity in order to buy an investment property or start a business. It mostly depends on what you are trying to achieve and if you are someone who can manage your debts responsibly.