What is Home Loan Refinancing ?
Home loan refinancing is a type of financing that is currently not very popular within the Philippines but has enormous financial implications that are viable for most. According to a survey by Bangko Sentral ng Pilipinas, over 60% of Filipinos own their homes without the need to pay mortgages and loans for it.
Refinancing is nothing but paying for a loan by taking a new loan. This is usually done so as to avail a lower rate of interest as compared to the previous loan. Other reasons for Filipinos to avail loan refinancing is to avail a new loan with better loan policies and programs, to procure a better and more flexible tenure. Another reason why customers would want to avail a loan refinancing is when to free some more cash.
Home loan refinancing, as the name suggests is refinancing taken on a home loan. This is especially advantageous because homes are assets whose value increase with time therefore a new loan taken on this increased valuation will prove to be financially advantageous.
Home loan refinancing is a feasible option for those with a good credit history. This is because, they will receive loan refinancing easily due to their record and ability to repay the loan without hassles. Although it is refinancing, the loan will have to be repaid, albeit at a lower interest rate. Those without a good credit record may not be able to obtain loan refinancing as easily and may also find it difficult to repay the same. This is why it is important for those obtaining loans, to ensure that they have a good credit record.
Before opting for a home loan refinancing, customers must take into account the moving charges which are referred to costs like legal fees, valuation, stamp duty and such. This itself would amount to about 2% of the loan refinance amount. Another aspect to be kept in mind is the lock in period that certain refinancing options come with. If customers would want to opt out of the loan refinancing prior to the expiration of the lock in period, then there would be a penalty amount charged which would be quite hefty. Home refinancing is a good option but customers must opt for the same only if it is beneficial for them.
There are many prominent banks within the Philippines that offer home loan refinancing. One of them is HSBC.
HSBC Home Loan Refinancing
One of the foremost banks in the world, HSBC Bank plc was established in Great Britain in 1865. It is a part of the four major clearing banks in the UK and offers various services and products such as loans, insurance, credit cards and so on. As part of its banking portfolio, HSBC Bank also offers home loan refinancing to all customers within the Philippines.
With the HSBC refinancing for home loans, customers can reduce their mortgage payment per month, opt for a fixed interest rate or even obtain cash to finance some other expense. With the HSBC Home loan refinancing option, customers can obtain a top up, as in borrow the entire amount or partly the equity of the property. Users can also avail reduced rates of interest, lesser installments, obtain additional cash for other expenses.
Customers make use of the increase in property value to obtain a larger amount while paying off the current home loan. The balance amount can be utilized in any way that the customer wishes to.
With the HSBC Bank home loan refinancing -
- Customers will receive repayment options that are flexible, such as either the ‘Straight Line Scheme’ through which customers can foresee their expenses or opt for the ‘Reducing Balance Scheme’ and save up on interest amounts.
- Economical interest review and repricing is another option that customers can avail of. A choice of two, three or five years rate repricing offers are provided.
- Customers can also repay the loan in the currency that is suitable to them such as US Dollars, Hong Kong Dollars or Philippine Pesos.
- Users can also procure a loan amount ranging between P700,000 to P50,000,000 or the equivalent in foreign currency.
- Other services that customers will have access to is fast processing of loans that enables customers to receive the same without additional hassles and undue inconveniences and also the convenience of personalised services.
Home Loan Refinancing is convenient for a number of reasons, but customers must have an understanding of their financial situation and the impact that a loan refinancing will have on their finances before going ahead with this.