If you are currently paying more than 2.5% on your housing loan, it is safe to say that you may be over paying and MoneyMind would definitely be able to recommend a lower rate to you.Refinancing is the solution to get a better interest rate and package. Now is the best time to refinance to a more advantageous package especially when financial institutions have been dishing out all the goodies to entice customers like you to make the switch.By refinancing, you would be able to enjoy savings from lower interest rates, to repay your housing loan in lesser years, and/or to gear up / cash out extra cash (to take up an equity loan on your property).

This can be achieved as long as the collective refinanced amount is within a certain percentage of the prevailing valuation of your property. However, the total quantum of loan granted would vary depending on the financial institution.

You should take note that certain penalties and fees may be imposed prior to the switch.

Some financial institutions have one or a combination of the following charges:

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Claw back of all fees (ie. legal subsidies, valuation fees, fire insurance, etc) paid on behalf of the customer upon taking up the initial housing loan.

4.

Refund of any cash rebate that was paid to the customer upon disbursement of loan (for cash rebate packages) should the full redemption of loan be within the commitment period.

It would be prudent for you to consider the net savings to see if it is worth the effort to make the change. There have been incidences where home owners have decided to make the switch even when there are initial costs involved with the forecast of potential savings over the mid to long term. Savings would not only be derived from lower monthly installments, but more importantly from the interest saved on the entire loan quantum. You would enjoy 2 fold savings from monthly installments and collective interest payments.

Home owners often consider refinancing their existing housing loans for these reasons:

1.

The current housing loan does not meet their needs any longer.

2.

They are dissatisfied with the current financier (this could be due to varied reasons from interest rates to poor service).

3.

They want to look for an alternative housing loan to enjoy lower interest rates and save hard earned money.

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They want speed in repaying their loan in lesser years to save on interest payments.

5.

They want to consolidate all their debts.

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They want to purchase an investment property and want to consolidate their home loans.

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They want to consolidate all their debts.

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