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What is refinancing (switching
of bonds or re-mortgaging)?
Refinancing is when you replace your existing mortgage bond with a new
one from either the same lender or a new lending company. This is
usually done to get a better interest rate to reduce monthly repayments
or to release home equity funds. Refinancing is usually done through a
refinancing broker.
Refinancing for lower payments
One of the most common reasons to refinance your current bond is to get
a better rate which translates into lower monthly repayments. If you
are struggling right now to pay off your monthly instalments, then you
need to look for a better deal.
Refinancing to release equity
Another reason why people refinance is to get hold of some extra money
by converting the equity they have in their property into cash. This is
especially useful if your property has gone up in price or if you have
paid off a large percentage of your mortgage. It is like taking out a
loan, but the rates are much lower.
If still indecisive on whether refinancing could work for you, you
could go through the following 7 steps.
Step 1
Check your loan agreement and check for any penalty clauses in the
event of refinancing. Some financial institutions do not charge a
penalty fee. If they do you can either wait out the penalty period or
pay the fee if it will amount to a substantial saving.
Step 2
Add up all costs payable with any new lender i.e. the initiation and
valuation fees. On average this should not be more that R1000-R5000
depending on lender. This is not a straight out of the pocket expense,
since this will be deducted from the loan amount. Legal fees should
also be added on, but an experienced Bond Broker should be able to negotiate
a discount on your Bond Registration fees.
Step 3
Contact a GPF consultant or mail us for an interest rate comparison
from various lenders. Pre-qualification happens immediately. If you
make contact before 11:00am we will get you a written quote the same
day.
Step 4
Do your calculations and weigh up whether refinancing will benefit you,
whether the long term savings will outweigh the immediate costs of
refinancing.
Step 5
Submit your application through a GPF consultant (086 110 6204) or
complete the shortened online application click here. Preliminary qualification
should only take up a few seconds of your time. We will negotiate a
discount on your bond registrations fees, just to say “thank you”
for using us.
Should you decide not to switch, but would like some additional
information send us an email to: mailto:info@globalproperty.co.za. We
would be glad to assist even if we do not benefit at all!
Step 6
After valuation and credit checks your new lender will issue a final
approval
Step 7
Our lawyers will then contact you and assist you with the registration
of your new bond
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