Mortgage is now a well known term. Mortgage loan is one of the most commonly negotiated bank loans. But what about such mortgage refinancing? It is possible that many people no longer have experience with this phrase. It is good to get acquainted with it at least because it brings considerable benefits to clients. So what does mortgage refinancing mean? When is the time to take such a step and can the mortgage be refinanced online?
What Is Mortgage Refinancing?
Mortgage refinancing means repayment of the existing mortgage loan a new mortgage loan. This new loan has different and often much more favorable terms. This product is most often offered by banks, but it is possible to meet refinancing also at non-banking companies.
Each bank has its own conditions. E.g. KB mortgage refinancing can be used by Czechs and foreigners living in the Czech Republic who can provide proof of income. It is possible to refinance a classic mortgage loan for housing, but it is also possible to refinance an American mortgage.
The most advantageous mortgage refinancing
The ideal moment for refinancing the mortgage is the time before the end of the fixation of the existing mortgage. Fixation is basically a contractual period for which the interest rate and the amount of the loan repayment do not change during its duration.
Banks generally inform their clients about interest rates one month before the end of this fixation period. Refinancing, however, should be considered earlier. A common question is whether it is possible to refinance the mortgage at the time of fixation. The answer is yes, but usually this is not worth it.
The reason is high fees for early repayment of the loan. Thus, the most advantageous moment of refinancing the mortgage is the period before the end of the fixation, when the client is not subject to sanctions for early repayment of the loan.
For mortgage refinancing before fixation, it is necessary to determine when the fixation period ends. Then, with regard to the remaining, it is necessary to start looking for a new bank that will offer better conditions. The final step is to refinance at the fixation date.
Mortgage refinancing – benefits
The main reason for refinancing is a more favorable interest rate offer. This allows the client to save on monthly installments. Mortgage refinancing also brings other benefits. What are the benefits of this product for clients?
- Possibility to increase mortgage
- Possibility to change the repayment period
- Possibility to get more favorable conditions for a mortgage
On the one hand, the client can increase the mortgage and thus obtain additional money. These can be used for reconstruction. Second, the client may extend the repayment period, thereby reducing the monthly installment. Refinancing entails the possibility of obtaining more favorable conditions. For example, a client can get rid of a bank that does not have good client access, etc.
Mortgage refinancing brings many benefits.
Online mortgage refinancing
Online refinancing is already common practice in the US or Scandinavian countries. This product, however, is also beginning to penetrate the Czech market. Banks are trying to facilitate the refinancing process as much as possible. Some banks are therefore now introducing a novelty that offers mortgage refinancing online.
This novelty was used by Czech Refinanso. In cooperation with Best Bank, it offers interest rates starting at 1.8% pa while online refinancing. Capital Lender also offers online refinancing.
What are the advantages of mortgage refinancing over the Internet?
- Processing speed
- Execution from the comfort of home
- Lower interest rates
- Absence of administrative fees
Mortgage Refinancing – Calculator
How to find the best refinancing conditions? If the client is not familiar with the current offer on the market, it is good to use one of the online calculators. Many mortgage refinancing banks have a calculator on their site. However, these calculators only count with parameters within a particular bank.
An example is the Mortgage Bank calculator. In a calculator of this type, you must enter basic information such as loan amount, repayment period and fixation period.
In a calculator of this type, you must enter basic information such as loan amount, repayment period and fixation period.
Fortunately, there are a number of online calculators that, by filling in a simple form, are able to depict the best mortgages on the market. These calculators also show the refinancing conditions, interest rates, reviews and other details.
Such a calculator can be found eg here. In this calculator you must enter the amount to be paid, the repayment period and the interest rate fixation. The calculator then calculates which of the banks will offer the best refinancing. For each refinancing is also an overview of discounts, which can further reduce interest.
There are a number of online calculators that are able to calculate the best mortgages on the market.
Mortgage refinancing – comparison
For the best comparison of mortgage refinancing, it is good to use some of the online calculators. The client can set his own parameters and edit the necessary details. The best refinancing bids are then filtered based on data such as the required fixation period or the required repayment period.