Although refinancing is a powerful tool to help homeowners to manage their current financial status, but it may not be suitable for some of them. If you are consider about refinancing, you will need to be cautions with refinancing loans if…
Your property have not built up much equity yet
➨ If you refinancing in very early in your home loan, your property have yet built up much equity and your home loan is still under lock-in period (penalty will be imposed for early settlement). If you are in this situation, refinancing may not suit to you for now. Do you research of your property before deciding to refinance your home loan.
You’re hurry to get the cash out money
➨ The bank will take some times to process your refinance application. It is different with personal loan, personal loan will provide a faster release of funds as processing for refinancing essentially takes about as much time as a regular home loan/ mortgage loan. Hence, you can’t get the cash out money right away.
You’ve had a problem on credit history
➨ Do note that only the borrowers with good credit history can refinancing their home loan while the borrowers with bad credit history will have the higher chances to be rejected by the banks. Besides, refinancing will increase your debt and this can further impact your credit history.
You’ve had no savings for the costs
➨ Since refinance is like you’re applying for a new home loan, then there is definitely have consist of entry costs (valuation charges, stamp duty legal fee and etc) on the new loan and existing costs on you previous loan (early settlement and etc). If you current savings is not quite much, you are not suitable to refinance your home loan now.
You expect to have a large amount of cash out
➨ Do take note that since 2013, some of the bank has imposed a tenure limit for cash-out refinancing and force the borrowers to make higher monthly loan repayments.
If you think the above 5 points are exactly talking about your current situation, don’t refinancing your home loan and find the other ways to solve the problems you facing now.