Can I Refinance a House That has Been Paid Off?
The short answer is yes. If you have paid off the original mortgage on your home, then you own it outright. Taking out a new mortgage or refinancing the house can be beneficial, but there are also risks involved. Pros Remortgaging your house allows you to borrow from the equity you have in your property. You can then use this borrowed money to make home improvements, pay off credit card debt, buy a new car, etc. Refinancing your home can make sense financially, but there are some cons. Cons The biggest reason not to refinance your home is the risk that is involved. Not only does remortgaging your home tie you to a new long-term financial commitment, but you also run the risk of having the home you once owned outright repossessed if you cannot pay off the new loans. In addition, refinancing a home may result in a higher interest rate over a more extended loan period than a five-year personal loan would. The loan term is another con to consider. If you plan on selling your home within the next few years, a new long-term mortgage may not be the best option. Discussing the possibility of a home refinance loan with a mortgage broker can help you understand the pros and cons. How does the process work? If you already own the property, lenders will look at the new mortgage the same way they assessed the old one. Banks will consider the property’s value, your income, debts you may have, and the housing market in your area. Most lenders allow homeowners to borrow 80% of their own home’s value when they remortgage their house. Refinancing a home that you already own is possible. A broker can help you decide if remortgaging is the best option for you by considering your financial situation and the plans you have for the future. Mortgage House knows the financial ins and outs of homeownership. A non-bank home mortgage lender, we are committed to finding our clients the best loans and mortgages that fit their needs. Visit our website to learn about our refinancing options.
Preparing for Possible Outcomes
When applying for a loan, some home loan applicants try to control the outcome. If the result is not favourable, the applicant may be devastated. If you are in the processing of completing mortgage applications, you need to understand the possible outcomes. Conditional Approval If your loan application was approved conditionally, it means that your lender has assessed and approved your loan but needs more information. The lender may need different payslips, a property valuation or a completed sale contract. Once you provide the required document or meet the other conditions, you may receive full approval. Unconditional Approval A loan approved unconditionally means that you have provided all the documentation your lender requires. They have assessed your loan application and borrowing capacity and authorised your home loan. Denied Sometimes your loan application is denied by a bank or other lender. It may be disappointing and frustrating when this happens, but it is essential to understand why they rejected your application. Poor credit history, including late payments Income that is insufficient to support loan payments and provide for your family A deposit that is less than 20% Other financial obligations such as child support or other loans Incorrect information or information that is not up to date or misspelled. No savings or credit history If a bank denies your request for a home loan, you can ask the lender why so you can have a better application next time. Financial brokers can also help you with your application, ensuring all the documentation is in order and meet the lender’s requirements. Mortgage House and our team of brokers can also offer you alternatives to bank loans. We may have a low doc or alt doc home loans that are a better fit for your financial situation.