Frequently Asked Questions
Frequently Asked Questions
Refinancing involves paying out your current loan with a new loan. It may shorten your loan term and reduce your repayments, so you can afford to make extra mortgage repayments and own your home sooner.
When you refinance the mortgage on your house, you’re essentially trading in your current mortgage for a newer one, often with a new principal and a different interest rate. Your lender then uses the newer mortgage to pay off the old one, so you’re left with just one loan and one monthly payment.
Home refinancing involves paying out your current loan with a new one. It may shorten your loan term and reduce your repayments, so you can afford to make extra mortgage repayments and own your home sooner.
Loan rates are in the 3-5% range
Refinancing involves paying out your current loan with a new loan. It may shorten your loan term and reduce your repayments, so you can afford to make extra mortgage repayments and own your home sooner
Cash-out refinancing happens when you take out a new home loan, drawing against the equity in your home to borrow more than you currently owe. But instead of using the extra borrowings to immediately pay for something else, the money is paid directly to you.
Mortgage points are the fees a borrower pays a mortgage lender in order to trim the interest rate on the loan. This is sometimes called “buying down the rate.” Each point the borrower buys costs 1 percent of the mortgage amount. So, one point on a $300,000 mortgage would cost $3,000
There are a number of upfront fees that can come with refinancing, however, these fees and how much they cost differ between each lender.
It’s important to take the cost of these fees into account when refinancing but also look at ongoing costs
For the average owner-occupier it is unlikely rates will go down in the medium term
The most common reason why refinance loan applications are denied is that the borrower has too much debt. Because lenders have to make a good-faith effort to ensure you can repay your loan, they typically have limits on what's called your debt-to-income (DTI) ratio.
Whenever you refinance a loan, your credit score will decline temporarily, not only because of the hard inquiry on your credit report, but also because you are taking on a new loan and haven't yet proven your ability to repay it.
Refinancing to access a better rate, improved features, or to consolidate debt can be a great way to save money. However, if you have a bad credit score, refinancing may be a little more difficult
The short answer is, yes, you can refinance with the same bank or lender. If you're satisfied with your current lender, that could be enough motivation to refinance with the same lender.
You're required to wait at least seven months before refinancing — long enough to make six monthly payments. Any mortgage payments due in the last six months must have been paid on time, and you can have a maximum of one late payment (30 or more days late) in the six months before that.
Most homeowners can temporarily pause or reduce their mortgage payments if they're struggling financially. Forbearance is when your mortgage servicer or lender allows you to pause or reduce your mortgage payments for a limited time while you build back your finances.
Disclaimer: Questions and Answers provided on this website are general in nature and are not designed for, or to be construed as financial advice or guidance. Please consult the team at Action Loans for more detailed / concise information, or let us know if you have any queries at all. Thank You.