FAQ
FAQ
Q: What is refinancing?
A: When you refinance your loan, it means taking up a new loan either from your existing lender or a new lender, in substitution of your existing loan. Refinancing allows you to change your loan to suit your new circumstances and needs.Q: How does refinancing work?
A: When you take out a new loan, you use some or all of the funds from the new loan to pay out your existing loan and the balance of the funds will be released to you.
Q: Why should I consider refinancing?
A: You should consider refinancing when you want:
1. A better interest rate
2. A lower monthly instalment
3. To consolidate your debts which attract high interest rates, ie, credit cards or hire purchase
4. Additional funds for renovation of your home or personal use
5. To enjoy new features offered in other loan packages, ie all-in-one account
6. Enjoy some tax advantages.
Q: How will refinancing benefit me?
A: If your loan is more than three (3) years old or is not subject to any penalty fee for prepayment, it is very likely that you will save interest when you refinance. It is a known fact that the spread over the Base Lending Rate charged by the banks has over the years been reduced (ie from 0.75% above the Base Lending Rate to currently 0.15% above Base Lending Rate for housing loans). And if the new loan package offers a low honeymoon rates for the initial years of the tenure, the saving in interest can be substantial.
Q: Should I refinance with interest rate rises?
A: When Bank Negara Malaysia increases the interest rates, banks and other lenders follow suit by increasing their Base Lending Rate and sometimes your monthly instalments. Refinancing your home loan from a variable rate loan to a fixed rate loan can protect you against the effect of an increasing interest rate and provide the certainty in respect of your monthly repayments.
Q: What is the cost of refinancing?
A: If properly advised, refinancing can save you a substantial amount of money. However the disadvantage is the cost involved in refinancing, ie legal cost, stamp duty and disbursements. You will have to weigh whether or not the benefits (ie the saving in interest) in the long run outweigh the short-terms costs of refinancing. If you are deterred by the costs of refinancing, there are loan packages where the new bank or lender will absorb and pay the legal cost stamp duty and disbursements of refinancing. Of course such lenders will price such costs into the interest rates offered but invariably refinancing will save you money if your existing loan is more than three (3) years old.
Q: How do I get started?
A: All you have to do is to make a copy of your supporting documents and furnish them to our mortgage consultant who will do the rest. You can book an appointment with book an appointment online. Our mortgage consultant will call you to arrange an appointment at a time and a place that suits you.
Question:
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