Steps to Refinancing a Home Mortgage in the Philippines
If you live in the Republic of the Philippines, or known simply as the Philippines, you may want to know how to refinance your home loan. You may want to refinance to cash-out the equity. You may want to refinance to take advantage of the lower interest rates or you may want to change from a variable rate to a fixed rate. You may also be interested in shortening or lengthening the time for repayment. Here are some instructions for you when you decide that refinance is an option.
Step 1: Find out from your current mortgage statement the pay off on your observe. If this is the amount you want to borrow then you will know what to include in your new budget for refinance. In 2010 the average rate of interest for home loans in the Philippines was between 7% and 10%.
Step 2: If your home mortgage is in the Philippines you may be charged a penalty for early payment. Look on your mortgage papers to find out if you will pay a penalty. If you do have a penalty find out how much it is from the lender. Since most mortgages in the Philippines are for a period of 1 to 10 years, you may decide that refinance is not an option for you with the penalty.
Step 3: Tell the lender that you need an application to refinance your home mortgage. He will ask why you want to refinance and you will have to give the reason why you opted to refinance. Find out the fees that will be charged for refinancing. If you are in the Philippines you will not be charged again for the documentary tax, the move tax or the registrations fees. These are one time charges that you paid on your initial mortgage. These are expensive charges so it is advantageous that you will not have to pay them again.
Step 4: Compare the quotes you received from other lenders to see who will offer the lowest rate of interest and consequently smaller payments. Some of the edges in the Philippines that offer refinancing are called, The Philippine National Bank, the HSBC Bank, and the Banco de Oro. You can also look at edges outside the Philippines for quotes in addition.
Step 5: Compare all the terms and the charges associated with the refinance quotes you received. List the pros and the cons of each. Pick the lender with the most advantageous offer for you and ask for an application form. Read the form carefully, fill out completely and precisely, and return the completed form to the lender of choice.
Step 6: You will need to include the documentation the lender requires with the application and the applicable fees. If you are not using the existing mortgage lender, you may be asked for a new appraisal on your home.
Step 7: The lender will estimate your application and the documents you sent. If you are approved for the loan the lender will mail a package of documents to you for your identifying characteristics. Do not sign the documents unless you understand them.