Home Loans: Pitfalls of Refinancing Too Often

SA Home Loans: There are times when it make sense to refinance you home loan like when you are lowering your interest rate enough to make a noteworthy difference in your mortgage payments or when you significantly decreases your loan term.

Another benefit is you need to consolidate your debt to improve cash flow. However, do not make the mistake of converting short term debt into long term debt. Rather keep the repayment short so that you can derive the maximum benefit from refinancing.

You have to carefully consider if refinancing your home loan will be beneficial to you not just in the short term, but over the long term too.

One mistake that a lot of people make is that instead of making refinancing a once off event , they apply for a refinance loan every time there is a little bit of equity available.

Some think that if they consolidate some of their high interest debt in the process that they’re basically debt free. However, except for decreasing your equity each time you refinance you are also increasing your home loan debt.

Instead of paying off your mortgage debt you have increased your loan term. If you refinance too often, although your monthly payments may go down it will cost you a lot of money over the long term.

Keep in mind that in the beginning of your home loan the largest part of your payment goes toward interest and not towards the reducing your capital. So, if you refinance too often you’ll end up paying the maximum interest for a very long time.

If you want to protect your equity use it as wisely as possible.

To find out more perks and pitfalls on SA Home Loans, visit our website through the links.

Home Loans Under Water

Many home owners are in arrears with their home loan installments or other accounts and they would like to apply for a bond to consolidate their debt. Sometimes it seems the banks just don't want to help.

It seems that the banks want to give you an umbrella when the sun shines, but when it rains they take it away....

Take heart, there is a solution where a home owner can get a home loan even if his accounts are in arrears.

There is a company you can be referred to that will advance a sum of money to pay off your debts and then clear your record. The debts are settled within the first month and the process of removing listings from the credit bureau takes 3 - 4 months.

Then they hand your file back to your home loans broker to do a regular bond at the bank because you now have no debt and a clear record. With the bond, the company is paid back their money plus interest (that's how they make their money) and you only have your bond and car (if applicable, because they don't settle cars) to pay.

This is nothing negative on your record and is not administration or debt review - it will actually clear your record.

For more information on these types of home loans, don't hesitate to contact us by visiting our website on http://www.gpfmortgage.co.za/home-loans.html