The procedure for lending a mortgage is called refinancing. It is advisable to resort to it in order to increase the loan term and reduce monthly payments, or to obtain a more favorable interest rate.
It is necessary
- - loan agreement;
- - application form for refinancing;
- - documents confirming income and work experience;
- - documents on the property;
- - other documents requested by the bank.
Instructions
Step 1
Initially, you need to assess the potential benefits of on-lending your mortgage. So, it makes sense to refinance a mortgage with a balance of payments of a five-year term, as well as with a balance of the principal debt of more than 30%. The benefit can be achieved by lowering the interest rate by 2.5-3%. With a smaller decrease in interest rates, the potential benefit could be diminished by the fees associated with refinancing. Among them are the state duty for removing a deposit from an apartment and registering a new one; the cost of services of the appraisal company; bank commissions for issuing a loan, maintaining a ship account, transferring money to the account of an old lender, etc.
Step 2
If you decide that loan refinancing will be beneficial for you, then you need to contact an appraiser who is accredited by the bank. A new appraisal of an apartment is necessary due to the fact that its market value from the time of obtaining the first mortgage can change both upwards and downwards.
Step 3
Contact your chosen bank with an application for refinancing your mortgage. It must be accompanied by a complete set of documents confirming the length of service, the sufficiency of the income level for the fulfillment of loan obligations, as well as for the loaned apartment. Also, the bank will need a valid loan agreement and a certificate of the remaining debt.
Step 4
The procedure for obtaining refinancing is no different from a primary mortgage. The bank will also carefully assess the solvency of the borrower and the liquidity of the collateral.
Step 5
In case of a positive decision of the bank to provide a loan to pay off the old mortgage, contact your creditor bank with an application for early repayment. After concluding a loan agreement with a new bank, within the agreed time frame, he will transfer the balance of the debt to the credit account. You will be provided with a new loan payment schedule. Then it will be necessary to remove the mortgage from the real estate and mortgage it in favor of the new creditor bank.
