It is for this very reason that most of the homeowners and property investors today are looking for methods on how they can increase their finances. Refinancing property can be a far better option! In today, we will tell you what is the costs are involved when you refinancing your property.
So, before you take action in your property refinancing, you would need to take note these several items;
1. Moving Cost
This is mentions to money you will need to spend on in changing for a new loan. When you decide to refinance your property, you will need to prepare the extra money to pay for the items such as valuation fees, legal fees, disbursement and stamp duty.
In addition, should you are refinancing the property witht he purpose of save on interest, do take note of this amount and compare it to the savings in interest you will get through refinancing. Fee structure are like property valuation fee, legal fee and stamp duty fee.
2. Mortgage Lock-in Period
If you’re ready to pay-off all your outstanding loan amount before the tenure expires, do check whether your existing loan has a lock-in period and whether you’re still bounded by it. For your information, the bank normally would charge a 2% to 5% on your original loan amount for penalty if you doing so.
In addition, if you fully pay-off your mortgage loan within the two to five years, you will then lead to a penalty for early settlement. So this is the meaning of “lock-in period” of your mortgage.
In summary, although you can save lot of money on mortgage loan interest and even able to get additional cash out from refinancing, but you’ll still need to prepare the extra money to pay-off the existing fees such as valuation fees, legal fees, disbursement and stamp duty. Furthermore, you will incur a penalty for early settlement if you get the cash out to fully pay-off your mortgage loan before your tenure expires.