You will need
- - credit agreement;
- - certificate of outstanding balance;
- - extract from the unified state register;
- - proof of income;
- - application for refinancing.
To reduce interest rate on existing mortgage through refinancing. It allows the borrower to obtain a new loan to repay the old mortgage. In the future, he is to pay for a new loan with lower interest rates.
You can refinance your mortgage at your Bank, or contact a third-party organization. The possibility of revising the terms of the credit agreement shall be provided in the contract. It is worth noting that banks rarely go on to revise the interest rates, just in case if you don't want to lose an honest customer. But if your Bank refused, you can go to another.
Mortgage refinancing is a little different from the primary loan. The Bank provided the application for issuance of a refinancing, the income statement 2-pit, the credit agreement, account statement, certificate of balance of debts, a certificate extract from the USRR, etc. the List of documents may vary depending on the Bank.
If approved, the Bank starts the procedure of refinancing. The borrower, it provides a loan for early repayment. The Deposit is removed and reissued in favour of the Bank. It is worth noting that at the time of renewal of the Deposit, many banks charge an increased rate.
Before you decide to refinance, you must carefully calculate the economic expediency of this step. In accounting it is necessary to take not only the interest rate but additional fees and commissions associated with the refinancing. Is the removal and renewal of a pledge, loan application, evaluation of the property, etc. In the General case, it is believed that the mortgage is to refinance the remaining balance of the principal debt of more than 30% before the onset of five years of payments on it. This is due to the fact that a large part of the payments on mortgage interest accounted for by the first years.
For those who are going to apply for a mortgage, there are several ways to reduce future interest rate. So, it is necessary to take out a Bank loan in which you receive a salary or have a Deposit. For such clients, banks offer lower interest rates. The size of rates affected by the term of the loan (the loan is shorter, the it is more profitable), as well as the size of the down payment.
In some cases, to refinance the loan may be problematic. For example, if the borrower has systematically allowed delay mortgage payments, banks are unlikely to give him a loan with a favorable interest rate. Also, some banks refused to refinance, if the borrower is no other housing, either in the apartment registered minors.
Some borrowers mistakenly believe that taking a mortgage in the currency you can save on payments, because rates on such mortgage lower by 2-5% against the ruble loans. However, foreign currency loans, it is recommended to take only those who have income in euros or dollars, otherwise the losses from currency fluctuations can negate the entire benefit from lower interest rates.