Mortgage refinancing is no different from a similar operation in relation to any other loan. This procedure is the receipt of money from a credit institution on more favorable terms to repay existing obligations. In this case, the initial loan can be taken both in the same bank and in another financial organization.
But not all credit organizations can offer mortgage refinancing. Banks engaged in such operations in the Russian Federation are represented by VTB 24 and Sberbank. While on-lending to other operations (such as car loans or consumer loans) can be found in many financial institutions.
Mortgage refinancing is that a new loan is issued, from the amount of which the previous debt is repaid. The property pledge is re-registered to the new lender, and the borrower repays the loan to a new credit institution. As a rule, such an operation is performed if it is possible to reduce interest, change the maturity or currency of payment. For example, mortgage rates in foreign currencies are almost always lower than in rubles. However, wages are paid in Russian currency. With the growth of, for example, the dollar exchange rate, the credit burden on the family budget increases, since large amounts in rubles must be converted into dollars. Therefore, it is sometimes more profitable to reissue a loan in rubles. It may also be interesting to renew a loan for a longer repayment period. VTB 24 Bank may be a champion in this regard, offering a maximum term of fifty years.
It is better to start refinancing a mortgage at the bank where it was originally drawn up, as a number of loan agreements have penalties for early repayment of a debt or a moratorium on premature termination of obligations. If the bank cannot provide the lending service, then you can go to another financial institution. In this case, you need to calculate how much it costs to get a new loan, and also decide on 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.
Mortgage refinancing is arranged in the same way as a standard loan. A legal or natural person submits an application, and a loan from
The institution checks its current solvency. If a person in the credit history had delays in the initial loan, then in another bank he may be denied re-lending, even if he has a sufficiently 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 the large amounts of loans and the long repayment period. At the same time, rates, for example, on consumer credit operations may amount to 18-20 or more percent.