Be prepared for paperwork
When you’re looking to refinance your home you need to be prepared to give the financial institution everything they need, potentially upfront. You need to have all your ducks in a row. You should also expect follow-up questions as well as a review of your credit profile. There is often extensive paperwork involved.
Always shop around
Some lenders refinance only existing customers, so it helps to shop around beforehand. You should call your lender and ask if you can refinance. Then you need to go to competitors and try to get pre-qualified so you can compare thoroughly. By doing this you’ll be able to see how you can negotiate a better deal.
Keep in mind that it can be time-consuming
Borrowers who are self-employed or who own multiple properties can run into problems even if they have good credit. So be prepared for a time-consuming process.
Shorten the loan term
It always helps to opt for a new loan with a shorter term. This way you won’t have to repay the loan over a long period of time- putting you at risk of changing circumstances.
Get access to your home’s equity
One of the most popular reasons for home refinancing is the fact that you can access the equity on your home before you sell it. This option is often cheaper than applying for a personal loan or getting car finance.
It can be risky
You need to consider the full costs involved in the home refinance process. Costs typically include second bond registration costs, conveyancing fees and the cost of valuing the property.
Before you enter into any home refinance agreement, you need to ensure that you have a clear understanding of the entire process. You need to be aware of the fact that the value of a home can depreciate. You need to be able to afford the increased instalments.