When you purchase a home, there is always mortgage attached to it. It is the mortgage that actually pays off the house, and it is the mortgage that you are paying for in actuality and not the home you are living in.

Of course, if you are unable to pay off your mortgage, then you can be sure your house will be foreclosed by your mortgagor and be sold off to regain the money they spent in buying the house for you. Most mortgages run for a very long time and can be very critical to one’s financial well-being.

For one, mortgages take so long a time that the owners of home are also forced to limit their expenses as well as their leisure just to make sure that they meet their monthly payments. That can be good, but for a prolonged period of time, it does take a toll on every person. No one deserves to be denied of their hard-earned earnings that way, with some having only enough left to satisfy the cost of living. There should be a way for someone to finish his mortgage payments earlier.

Refinance Your Debt

Most mortgages run for terms as long as twenty to thirty years, with very high interest rates as well. Life can be hell for the mortgagee for that span of time, and twenty years is a very long time at the least.

Nowadays, however, newer mortgages can be had for lower interest rates as well as shorter time periods. You can do that through mortgage refinancing.

Mortgage refinancing is merely restructuring your debt in order to attain shorter time or lower interest rates. Lower interest rates are now possible because of tight economical conditions as a result of the mortgage crisis and also because creditors are so many that the competition has become tight. If you have signed up for a very long mortgage period and has spent some years paying off your house, you might as well start thinking about refinancing your mortgage.

What Happens When You Refinance?

Once you tap the services of a mortgage refinancing firm, your new mortgagor will then pay off your existing mortgage with a new note. This means that, in the eyes of your old lender, you have paid off your mortgage.

However, you now owe your new mortgagor money. The new mortgage will be according to terms of your own choosing, so if you have experienced an increase in income and are confident of higher terms, then you may want to start thinking about refinancing your current mortgage. If you are enjoying increased disposable money due to increases in income, why not use them to shorten your mortgage terms and be debt-free?

Another one of the effects that you will experience with mortgage refinancing is improved credit score over the next few years. In addition, you get to shorten the payment period and thus pay off your house quicker than you would have with your terms of your old loan.

CONTACT US

Speak to a home loan consultant about financing your new property or reviewing your existing mortgage. We are able to assist in lowering your bond repayments and securing attorney discounts.

Complete this short form online
Call us on 011.327.4489
Email: morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za

1. Your own bank will seldom give you the best home loan deal.
This trend has become more and more evident over the past year, as banks try to woo new clients from their competitors. Moreover, we’re seeing a sharp rise in instances where bonds are being declined by a client’s traditional bank and approved by another bank with which the client has no connection.

2. Your bargaining power ends the day your bond is registered.
If you’ve ever tried to get your bank to lower your bond rate, you’ll know what I mean. Make sure your bond originator shops around among the various lenders to secure the best possible rate concession. It’s too late to seek a better deal once your bond is registered and switching your bond from one lender to another is no longer viable.

3. You must give 3 months’ notice to cancel your bond.
When you sell your property, you should give the bank 90 days’ notice of your intention to cancel your bond. If you don’t, you’ll be charged a punitive cancellation penalty equal to 3 months’ interest. On a bond of R1million, this is like throwing R25 000 down the drain. The banks are inflexible on this cancellation penalty, and will no longer waive it, even if you place your next bond with the same bank.

4. Voluntarily increasing your monthly payment by a small amount will knock years off the term of your bond.
The miracle of compound interest! Play around with the Bond Calculator on my website and you’ll see that by repaying an extra R312 per month on a R1m bond, you’ll knock 5 years off the term of a 20 year bond and save yourself R433 160!

5. Make sure you’re getting the best insurance deal
Homeowners Comprehensive Insurance is compulsory if you have a bond. In the past, this cover was provided automatically by the bank (the mortgagee) and you were not allowed your own choice of insurer. Now you, the mortgagor, can shop around for the insurance cover that best suits your needs, and your pocket. Be aware, though, that should you choose an outside insurer, the bank may levy a monthly “admininstration fee” on your bond and this could negate the effect of a cheaper premium.

CONTACT US

Speak to a home loan consultant about financing your new property or reviewing your existing mortgage. We are able to assist in lowering your bond repayments and securing attorney discounts.

Complete this short form online
Call us on 011.327.4489
Email: morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za