This means a couple of facets. The main point to understand is that a lender won't just give you a fresh, better interest rate. You'll be asked to provide earnings proofs and your credit rating will be examined, as with the first loan. This implies, naturally, that there will be charges involved. You'll need to pay closing costs for this loan as you did the first time.

Another significant detail about remortgage is that, if your monetary position has changed, you might not qualify for a mortgage or you may not receive a better interest rate. For instance, if at the time of the initial home loan, you and your spouse were both employed full time, and at the present, one of you has decided to resign, it doesn't matter that you're paying the home loan on time each month; the lender will see the change in earnings.

Naturally, if you refinance home mortgage, you're taking advantage of a reduced rate of interest to save cash. There is, however, more than one method to save money. You can maintain the term of your loan the same as it currently is and decrease the monthly payment amount or you could continue your payment the same and shorten the duration of your home loan. In the event that your monetary situation has gotten better from the time of the first purchase of your property, you might even think about increasing your installment in order to shorten radically the period of the home loan, saving money on interest charges.

Posted by karthika on Friday, July 13, 2007 at 11:53 PM | Permalink