The refinancing of a loan is a service offered by many financial institutions. The refinancing is usually articulated around the existence of a mortgage loan that coexists with other types of personal loans and other forms of credit: credit cards, deferred payments, shopping cards. If the main mortgage loan has been being amortized and has become already a return of contributions, whose sum of capital reaches a minimum between 10 and 20% of the total amount of capital, it is possible to go to this solution. The instrument consists of the establishment of a new mortgage, sometimes called a second mortgage, the amount of which should be enough to cancel the old mortgage and make capital available to cover the remainder of payments intended to encompass. The advantage of the refinancing is that if he is articulated through a second mortgage loan, the interests that accrue the operation will be much smaller than if you go to a personal loan.
The disadvantage of the operation is the coverage of expenses that must be satisfied, notary public, expenses of cancellation of the first mortgage, second mortgage, registration, possible charges Constitution expenses taxes generated by the operation. Before signing a refinancing of a loan you need to make sure that the amount of the new quotas will be affordable for the borrower, therefore should be a good economic study is proof that the current income will be sufficiently high to cover the costs of the loan. An interesting alternative, before going to the living loan refinance, is negotiating with the Bank with which you have formalized this mortgage loan, reducing the depreciation of quotas, this would suffice to extend the pending settlement terms, i.e. raising the total period of the life of the loan. Before opting for a variation of the existing loan or a refinance should ask and have recorded in writing, all expenses, commissions, payments (e) taxes will lead each one of the two operations and compare the amount of quotas.