If we happened to use a mortgage, we know perfectly well what burden it is. But despite the commitment to the bank for many years with such a commitment, there may be an offer of a more interesting product that can change our financial situation. This is a refinancing loan we can apply for in another bank. And under what conditions and when? Read below.
There comes a time in the lives of many people that they undertake to take out a loan for many years, e.g. to build a house or to buy an apartment. Then, we have to reckon with the fact that a lot can happen on the financial market. Among such variables, we can see that our loan taken for x years is no longer attractive. And there are offers that would suit us better. Then a reflection appears to consider a refinancing loan. It will simply be a replacement of the loan that we took earlier for a completely new one, much more favorable, even at another bank – it is possible. The main anchor point on which you can rely is to compare the interest rate on our loan, taken up a few years earlier, with current offers that contain much lower interest rates. We should be careful not to confuse the terms and not to use the terms refinancing loan and consolidation loan interchangeably. These are two completely different products. Let’s remember that a refinancing loan will allow us to transfer a liability from one bank to another.
Mortgage holders have the main access to such a loan. This is due to the fact that a large loan is taken out for a few, several or several dozen years. It is obvious that for such a long time, the conditions on the financial markets must change, usually to the disadvantage of all those who have taken out mortgages many years back. Hence, access to refinancing loans for these clients. If we come to the conclusion that the terms of our mortgage are not favorable at the moment, we can try to refinance the loan that will allow us to calmly and safely repay the remaining part of the liability, which we incurred, e.g. for the purchase of an apartment or building plot for house construction .
When considering whether to consider refinancing a loan, you need to be aware that the installment that we repay every month consists of several elements. Namely, interest rate, bank margin or WIBOR 3M. And while we have no influence as a customer on the interest rate, we can discuss the margin with the bank in which we make the commitment. When we negotiate an attractive margin for us, the monthly mortgage installment will automatically decrease. And there are also cases when the bank’s clients have several mortgages, which is already an excellent basis for thinking about refinancing. It may be associated with a change in our financial condition – worse or better (which will allow for faster repayment of loans, on completely better terms, which could not be obtained before).
Before we decide that we want to refinance our loan, we should carefully analyze the market and the loan offers available on it. Because, apart from the interest rate itself, other costs that will have to be incurred will count, and which will ultimately affect the amount of the new commitment that we want to decide on. The refinancing loan costs will include:
If after calculating all these costs it turns out that the sum is in plus compared to the previous costs of our commitment, then we can conclude that the new offer – refinancing loan will be beneficial for us.
When we analyze the offers of all banks in terms of refinancing loan and we do not find one that interests us, we can try to renegotiate our current liability with the bank where we incurred it. However, we must be aware that our bank does not have to agree to this. And if so, it will be a fairly long process without guarantee that it will be possible to agree on a change in the terms of the mortgage. Because we remember that the bank always counts on its profit, despite the pro-client policy. That is why it is also worth considering the possibility of using an alternative solution offered, which offers safe and convenient financial products, available completely online. All information about the proposed products that will be tailored to the customer’s capabilities will appear after completing the simple form, and then you can choose the best offer for us.