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Loans and Mortgages

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Mortgage Refinancing

May 21st, 2012

Mortgage RefinancingRefinancing is a loan used to repay another loan. Question is how refinancing can lower mortgage installment?

Changes in the mortgage market in 2010, resulted in a significant increase in profitability of the existing loan repayment with a new loan, contracted in another bank (refinance). This applies in particular loans denominated. Refinancing is a possibility of lowering the mortgage installments up to 20%.

In August 2010, came into force some regulations, according to which banks should paid to the customer if requested a credit in the currency in which it is denominated (or indexed). For some time, customers may also pay back loans in the currency in which they are taken. This is particularly important in the case of refinancing loans. It eliminates the additional cost of the spread rate, and therefore the difference between the selling rate and buying the currency at a bank crediting (which reaches up to 9%).

Last year, banks lowered mortgage margins twice, both those expressed in euro and dollars, which led to a significant reduction in interest rates and decrease the amount of payments. As a result of refinancing a loan taken in 2009 or the first half of 2010 is now much more attractive.

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