Where can I make a mortgage refinance?

Refinancing a mortgage is no different from a similar operation with respect to any other loan. This procedure is the receipt in a credit institution of the amount of cash on more favorable terms for the repayment of existing obligations. At the same time, the initial loan can be taken either in the same bank or in another financial institution.

But not all credit institutions can offer mortgage refinancing. Banks that deal with such transactions in the Russian Federation are represented by VTB 24 and Sberbank. While on-lending to other operations (like a car loan or a consumer loan) can be found in many financial institutions.

Refinancing of a mortgage consists in the fact that a new loan is drawn up, from the amount of which the previous debt is extinguished. The property pledge is re-registered to a new lender, and the borrower repays the loan to a new lending institution. Typically, such an operation is carried out if it is possible to reduce interest, change the maturity or currency of payment. For example, the rates in the currency for mortgages are almost always lower than in rubles. However, wages are paid in Russian currency. With the growth, for example, of the dollar, the credit load on the family budget increases, since large amounts in rubles need to be converted into dollars. Therefore, sometimes it is more profitable to re-issue the loan in rubles. It may also be interesting to reissue the loan for a longer repayment period. VTB 24 in this respect may be the record holder, offering a maximum term of fifty years.

It is better to begin refinancing a mortgage in a bank where it was initially registered, as in a number of loan agreements there are penalties for early repayment of a debt or a moratorium on premature termination of obligations. If the bank can not provide a service for on-lending, then you can go to another financial institution. At the same time, it is necessary to calculate how much the new credit will cost, and also to determine the difference in interest rates. Experts believe that refinancing is impractical if the new rate differs from the previous one by less than two percent.

Refinancing of a mortgage is made in the same way as a standard loan. A legal entity or an individual submits an application, and a credit The institution checks its current solvency. If the person in the credit history was in arrears on the initial loan, then in another bank he may be denied on on-lending, even if he has a fairly high level of income.

The most interesting parameter for any borrower is the refinancing rate. Mortgage in this regard is a fairly "cheap" financial instrument, since the rates here are about 12.5 percent (for example, in Sberbank). This is due to large amounts of loans and a long maturity period. While rates, for example, on consumer credit operations can be 18-20 or more percent.