The recent Demonetisation has everyone on edge, especially those who have taken home loans. Many people are wondering whether rates will be slashed and whether home Loan Refinancing is a good idea. If you are halfway through your loan then going for home loan refinancing might be a good idea.

There are several advantages going for home loan refinancing. Home Loan refinancing means applying for a new loan from a different lender so that you can pay your existing loan.

The two most common reasons why people go in for Home Loan refinancing are, firstly they benefit from a lower interest rate and secondly it also acts as a top-up on an existing home loan.

There are several other reasons as well which prove that home loan refinancing is beneficial.

Here we are also going to tell you about them.

You save on the interest – One the most common reason why people go in for Home Loan Refinancing is because they tend to save a lot on the interest.  If the borrower finds a lender who is offering a lower interest rate than the current one, then he might consider refinancing of the home loan from the second lender. In the longer run, it will ultimately lead to a decrease in his monthly EMI payments.

Top Up for the previous loan – As we mentioned earlier that a Home Loan refinancing also works as a top up for the previous loan, a number of people go for it. Do keep one thing in mind before applying for it is that make sure that you are getting a lower interest rate.

Factors to keep in mind before you apply for a home loan refinancing

• If you are planning to opt for Home Loan refinancing make sure you do that at an early stage, don’t wait for too long. The earlier you opt for refinancing the loan, the lesser the interest rate you will have to pay.
• Know about the processing charges, valuation fee and other associated charges that are levied on the new loan.
• Get a statement from your present lender confirming that all loan related documents will be transferred to the new lender within a specific period of time?

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