How to change home loan lender?
Finance institutions make it easy for borrowers to switch lenders and refinance their home loan on better terms. You can carry out a home loan balance transfer through a simple 3-step process.
Note down the advantages
If you want to initiate a home loan transfer, start by listing out the features and services you will benefit from with your new lender. For instance:
- Lower home loan interest rates
- Improved flexibility of payment schemes
- Better loan features and customer service
- Enhanced management of payments, personal budgeting, and savings
Before approaching a different institution, it would be prudent to talk with your present lender, to see if they can offer a better deal. Getting the new offer in writing is advisable, as a written offer is helpful in negotiating with other lenders.
Compare the cost of switching home lenders
The home loan transfer process to a new lender almost always involves different fees, specifically, regular administrative charges, the loan establishment fee, and the mortgage insurance of the new lender. If the present loan is a fixed-rate one, the borrower may have to pay for an early exit.
Although a home loan balance transfer to a new lender involves extra fees, the cheaper home loan interest rate and a different home loan product will likely help you recover most of the initial cost within two to three years.
Start application for loan refinancing
You must prepare all the supporting documents that your lender may require for a smooth home loan transfer. These documents include proof of earnings, tax returns, and documents of existing loans and expenses.
Also read: How to transfer home loan to another person?