Other Article: Six Insider Suggestions on Mortgage Refinancing
As a former boss of a mortgage company, I know that mortgage refinancing is time-consuming, laborious and complex. The following six suggestions can help you maximize the use of real estate for secondary financing:
- 1. Focus on interest rates rather than installments. If your mortgage term is long enough, you can mortgage your house for 30 years to pay off the loan, but you won’t make much profit.
- 2. Remember, the principal in mortgage installments is equivalent to savings, and the more the principal, the better. Because this is equivalent to that you are transferring assets from your current account to your “home equity” account.
- 3. Home equity is not easy to spend – this is a good thing! It was not difficult to use home equity before 2008, but it is quite difficult today. We should be grateful that the market rules have enabled us to learn self-discipline and let our houses increase in value. The net value of housing makes the living environment, neighborhood relationship and community environment more stable.
- 4. Select the shortest mortgage term. The shorter the mortgage term, the lower the loan interest. In other words, 15 year mortgage interest is much lower than 30 year mortgage interest. The shorter the mortgage term, the higher the installment amount, because the more principal you repay each month. (See # 2)
- 5. Don’t spend your savings until you get a loan. The manager who submitted your loan application could not approve your loan application. But it is almost certain that the loan manager is more optimistic than the guarantor (the person who decides the approval of the loan) for the simple reason that the loan manager charges a commission. Without the loan, there is no commission. Even if there is little hope for the mortgage application, the loan manager can also get a commission.
- 6. Follow the requirements of the loan manager. The process of applying for a loan can easily be frustrating. Sometimes the loan manager will ask you to do something strange, which is more ridiculous than letting you jump on one foot and scratch your stomach. But if you want to get a mortgage, you have to do it. Although you may ask why you want to jump and scratch your stomach with one foot, don’t forget to do so while jumping. Generally speaking, such requirements are put forward by the guarantor. The guarantor may not communicate directly with the loan manager, so the loan manager is not clear about what is going on. Refusing to provide the requested information will result in your loan failing to pass the approval.