When to Refinance?

A mortgage refinancing (refinancing) refers to transferring an existing mortgage to another financial institution or changing the terms of the loan within the same financial institution. Below are some of the situations in which a refinancing of a mortgage is appropriate:

1.Lower interest rate: If the market interest rate falls, you can obtain a lower interest rate by refinancing your loan, thus reducing your monthly repayment and total interest expenses.

2.Improve cash flow: by refinancing your loan you can extend the term of your loan, thus lowering your monthly repayments and increasing your monthly cash flow.

3.Improved loan terms: If you are not satisfied with the terms of your existing loan, such as the repayment term, repayment method, etc., you can refinance your loan to obtain loan terms that better meet your needs.

4.Consolidate debts: You can consolidate other high interest rate debts into your home loan by refinancing your mortgage in order to take advantage of lower mortgage rates.

5.Obtain additional funds: If the value of your home increases, you can withdraw additional funds from your home equity for renovations, investments or other purposes through a refinance.

6.Change loan type: You can switch from a variable-rate loan to a fixed-rate loan or vice versa to cope with fluctuations in market interest rates.

7.Increased flexibility: Some loan products offer more flexibility, such as allowing early repayment or providing more flexible re-borrowing options.

8.Quality of service: If you are not satisfied with the service provided by your existing lender, you may consider switching to a financial institution with better service.

There are several costs that may be incurred in making a refinancing:

1.Application fees: Some lenders may charge new loan application fees. These fees may include processing fees, documentation fees, etc.

2. Valuation fee: When applying for a new loan, the lender need to revalue your property, which may incur a valuation fee.

3.Early Termination Fee: If you pay off your loan early before the original loan is due, you may have to pay an early repayment penalty. This is more common with fixed rate loans.

4.Registration Fee: A government property registration fee is required to record new loan information.

5. Legal and Settlement Fees：Costs involved in the preparation of legal documents and the settlement of the loan.

6.Account Maintenance Fee: Some loan products charge a monthly or annual account management fee, which needs to be taken into account when you switch to a new loan.

7. Lender's Mortgage Insurance（LMI）:If your loan amount is more than 80% of the property's value, you may have to pay for new lender mortgage insurance.

Before making a decision, it is advisable to consult with a MoreMore Finance loan specialist to ensure that the remortgage is in line with your financial goals and situation.