What is refinancing ? what are the benefits of it?

Akash Kanojia, Delhi

29th November 2014

Real estate News in Delhi

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Replies (1)

Hi Mr Akash,
Refinancing your home loan essentially means that you pay out your existing home loan before its tenure and replace it with a new one. It is an excellent tool to manage your debt load, reduce your financial stress while saving your money. It also ensures that you are not bound to one financial institution for the entire tenure of the loan.

Tushar Surendren, Delhi

29th November 2014

Comment

There are several ways that a new refinanced loan can help your family manage their monthly budget as well as long term financial goals. Major two primary reasons that you may want to consider refinancing your home loan are Refinancing to lower your rate of interest & Refinancing to shorten your loan tenure.

Subho Mallik, Delhi

29th November 2014

According to me, refinancing to lower your rate of interest, this means Interest rate is a crucial factor to consider when refinancing your home loan. Many people like to refinance when offered a lower rate of interest. Experts claim that if you are getting a difference of 0.75-1% between your existing rate and the rate of refinancing, you will end up saving money in the future.

Sufia, Delhi

29th November 2014

Well as per my knowledge, refinancing to shorten your loan tenure is stands for If you are looking to shorten your loan tenure, refinancing your loan is a good option. A sudden windfall or increase in income you may lead you to find that you can easily afford a lower tenure loan without any strain on your monthly budget. Refinancing your loan is wise in such a situation.

Raj Roy, Delhi

29th November 2014

In my opinion, while refinancing is your personal choices, there are certain times, when it is the best decision to make. There are some situations when refinancing will definitely benefit your monetary situation. One of the situation is borrowers who have a good credit history and CRISIL score can negotiate for favorable borrowing rates. If your credit score is much better than it was when you first got your home loan, it’s possible that you can refinance your home loan at a better interest rate.

James, Delhi

29th November 2014

In my point of view, another situation is you many also want to opt for refinancing when you have a change in your income – either an upward increase to a lower revision. Or If current interest rates are substantially lower than what you pay on your existing fixed home loan, then refinancing your loan would be a wise financial decision for you.

lekshmi.sanjeev@ymail.com, Delhi

30th November 2014

Hi Akash,

As per my knowledge, refinancing a home loan doesn’t pay off the debt, it just restructures it, often at a lower interest rate and a different loan term than the current mortgage. However before taking a decision on refinancing, one must consider the hidden costs- i.e. the pre-payment penalty, which may be 1% for a public sector bank and up to 3% for private sector bank and the new loan process charge.

Richa, Delhi

1st December 2014

Hi Guys,
I am not against of refinancing home loan.Actually it is very much helpful. But in my point of view, refinancing your mortgage will save you money, but it can also be an expensive affair and one should undertake it only after ensuring that amount you save offsets all the settlement costs. Just be cautious guys.

Rakhi Bansal, Delhi

1st December 2014