Basically real estate refinancing is a loan where you offer collateral in exchange for credit. If you cannot repay the debt, the property will no longer be yours. It differs from property financing, because in the second case you want to buy a property, take the money in the institution to pay it in cash and gradually repay the loan.
Already in real estate refinancing the property is already yours and you put it as a guarantee of a loan, where the money will be used for the purpose you want. In this type of credit the property continues in its name and will be fiduciary sold to the creditor institution, which does not prevent it from having direct ownership of the property.
What are the advantages of real estate refinancing?
This type of loan has been widely used due to the great benefits they can bring to those in need of money. See some advantages of this line of credit.
Lower interest rate
As you are providing a collateral for your loan, the risks of the transaction decrease, so that the financial institution may charge far lower rates than the traditional loan.
Longer payment terms
Payment terms can be quite long which makes the installment have a smaller value making it accessible to more people.
Another important point is that your company revenue can also be used as a basis for setting the amount you can pay per installment month.
High value loans
The same reason interest rates are lower also works for the loan amount. As the bank has a guarantee it will have less risk in raising the value.
The higher the value of the property, the higher the chance that you will have a higher credit released. On average 50% of the value that your property is appraised by the financial agent is released.
Be able to do what you want with the resources
In real estate refinancing it is not necessary to say what will be the destination of money, meaning you can use it for whatever you want. In other forms of credit you need to have a specific destination.
Those customers who have debts in the bank and wish to repay them can use this mode. So they pay their debts and still have the change to whatever they want. Then just go by repaying the parcels gradually.
How Settlement Deadlines and Mortgage Refinance Rates Are Set
Repayment up to 20 years can be found, depending on the amount of the credit, the amount of the installment and the bank where it will be made.
The client will have the flexibility to choose the amortization mode that is most convenient for their financial planning. The two forms used are the price table and the Constant Amortization System – SAC.
In the first the value of the benefits is always equal. In the second, the portion begins larger and decreases over time.
Interest rates will also vary depending on the financial institution you choose. It is therefore important that you do market research to find the best option.
Your income will influence you to get the loan. The installment cannot exceed 30% of your monthly budget. Ideally, it is up to 15% so you have no future problems for not being able to pay.
Tips for Real Estate Refinancing
To make your life easier we will give you some tips that will help you get the best loan possible.
Research, simulate and compare prices
Once you have decided that you need a loan, the first thing you need to do is research which bank will give you the best terms in the market.
Find out about interest rates, installment amounts, terms, minimum required rent, etc. Simulate each financial institution (this can be done online).
Plan your budget
Before closing the contract make sure that you will be able to pay the debt. Do not make a loan that could hurt your future. Especially because you risk losing your property.
Make a plan to include the installment amounts in your budget without weighing or having difficulty paying them.
Steps to Real Estate Refinancing
Finance Everything has several accredited institutions and its pre-analysis is made within 30 minutes.
They will return to you telling you if your registration has been pre-approved to no. If so, they will request additional data and some necessary documents.
Your documents will be reviewed and if approved you will only need to sign the contract.
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