Have you ever wonder if you can do a home refinancing for property less than two years?
What is Home Refinancing?
Home refinancing is a process where a homeowner applies for a new loan from a different bank to pay off an existing home loan.
This process is usually done to obtain a lower interest rate, a more extended repayment period, or to pay off other debts.
Home refinancing can also provide an opportunity for homeowners to extract equity (the difference between the market value of the house and the remaining unpaid loan balance) from their homes.
This equity can then be used for various purposes, such as debt repayment, home renovation, investment, and others.
But can a house that is only 2 years old be refinanced?
The answer depends on several factors.
Important Criteria For Refinancing a 2-Year-Old House
Refinancing a house that is just 2 years old requires careful consideration. Here are some important things to consider.
Market Value of the House
The first thing you need to know is the market value of your house. If the market value of the house has increased significantly (usually more than one hundred thousand), this might be a good reason to refinance the house. This is because banks usually only provide a loan margin between 80-85% of the market price of the house.
However, if the market value of your house has only increased slightly (only around RM10-20k), this may not be enough to cover your old debt balance, and this can hinder the home refinancing process.
Lock-in Period
The second thing to consider is whether your home loan is still in the lock-in period or not. The lock-in period is a time during which you are not allowed to close your home loan account.
If you close this account during this period, the bank will impose a penalty.
The lock-in period is usually 3 or 5 years, and the penalty imposed is between 2-3% of the original loan amount.
Readiness of the House
The third thing you need to pay attention to is the status of your house. If your house is 2 years old but is not yet ready, you cannot refinance the house.
This particularly applies if you have bought the house from a developer.
You need to wait until the house is ready and has received a Certificate of Completion and Compliance (CCC) before you can refinance.
Conclusion
Overall, home refinancing is not a decision that can be taken lightly. There are many factors to consider, including the market value of the house, the lock-in period, and the readiness status of the house.
If you have any questions or need assistance regarding the home refinancing process, do not hesitate to contact us.
We are here to help you make the best decision for your financial situation.
Always make sure you do research and get the right advice before deciding to refinance your home.
Thank you for reading this article, we hope it helps you better understand home refinancing.
If you require further clarification regarding the refinancing process or personalized advice, we recommend reaching out to a mortgage consultant, such as ourselves.
Contact us here.
Whatsapp: https://wa.me/+60126946746
Before you go, read this article:
How to Refinance Your Home Loan
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