There are some great ways to save on a home loan repayment. You can find a lower interest rate or switch from a fixed rate to a variable rate, or vice versa. You may also want to consolidate your debt so that you reduce the overall interest you’re paying.
Here are some pointers you need to keep in mind before opting for a home loan balance transfer:
Learn how to identify high mortgage charges
If there is only a nominal difference between the interest rates of your previous loan and new loan, you might end up paying more than you were with your previous loan. This usually happens when you mortgage assets with your refinancing lender and are required to pay heavy mortgage fees.
Choose the right lender
When you’re looking to transfer your home loan, don’t choose the first lender you come across. Shop around a little to make sure you find a lender who offers you the best benefits. Most importantly, your lender shouldn’t levy high prepayment penalties on you.
Additional Read: Your guide to getting better home loan interest rates
When you’re planning to refinance a loan, you need to watch the market, keep track of interest rates, make all the calculations you need to, and see exactly how much you will be saving. You should also research the new loan that you’re planning to apply for so that you will know how much you need to pay every month once you refinance your loan. An online home loan EMI Calculator will help you do this.
How often should you refinance your home loan? As often as you need to keep saving money. When you have a home loan provider that makes the job easy for you, you don’t need to wait for interest rates to continue to fall. All you have to do is maintain a firm grip on market trends and interest rate forecasts to make sure you don’t have to pay any additional costs.
Here's a handy guide to help you refinance your loan.
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