What's the difference between Refinance and Reprice? Well perhaps some of you may not even have heard of the word repricing.
Refinance means that you change your mortgage loan on your existing property to a different bank so as to enjoy a lower interest rate.
Repricing means that you change to a better mortgage loan package on your existing property with the same bank to enjoy a better interest rate.
So basically, it's actually a similar thing except for whether you use back the same bank or you use a different bank for the mortgage loan in order to get the lower interest rate. But you generally can't do that within a certain lock in period (usually within the 1st 1-2 years where you get the fixed low interest rate). This may vary with your bank so do check them out. Usually repricing is easier as your bank will certainly want to retain you as their customer.
If you don't do anything, you'll definitely pay a higher interest the longer you are servicing your loan with your existing bank. But if you do something, the interest you pay will certainly be better than if you do nothing at all. So TAKE ACTION NOW! Call your bank for a repricing if you have not done so in the pass 1-2 years that you are servicing your mortgage loan.
You have given me very good idea about the mortgage loan and also about the refinance and reprising. You have conveyed great information.
ReplyDeleteI haven’t heard much about repricing. However, refinance is a common option in order to get rid of the high interest rates. The option of refinance will help the borrowers to reduce their monthly payments and get favorable terms to pay off the loan. However, a borrower can refinance his or her loan only when he or she has equity in the property. Moreover, he or she should have a stable financial situation and excellent credit scores. Also, one should refinance only when the rates are going low. If the rates are higher than your present mortgage rates, it won't make sense refinancing the loan and paying off money in closing costs.
ReplyDeleteOf course, you should only implement the repricing and refinancing when it makes logical sense to do so, usually after around 3 years down the mortgage loan period, where the low interest rates has been reverted to a much higher interest rates. And ensure that you've checked on your financial situation before you does the above as you need to ensure that your new loan will be approved at the stated lower interest rates.
ReplyDeleteOnly do it if it's better off for you. Don't do anything just for the sake of doing. It should at least benefit you before you implements that.