When to refinance a loan?

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It is worth remembering that the loan is not a judgment and you do not have to bother dozens of years with the conditions that you once agreed to. You can refinance your commitment, which means taking a more attractive loan to pay back the previous one. an elucidation on

A refinancing loan 

A refinancing loan 

The bank, granting a refinancing loan, as in any other case, checks the creditworthiness of the applicant. It may seem that since one bank once granted a loan, the other will accept it all the more (as lower installments will be repaid). Unfortunately, it is not so beautiful because each institution has a different credit policy. In addition, it could have been several years since the housing loan was granted, and from the perspective of the borrower’s financial possibilities it is a lot of time. Checking your creditworthiness plays a key role and you just can’t get around it. However, the game is worth the candle.

Grant a mortgage loan

Grant a mortgage loan

Mr. X took out a mortgage, but did so at an unfavorable time – when banks were reluctant to grant loans, which imposed high margins. When market interest rates increased, the interest rate on liabilities also went up. Mr. X knows that if he took a loan today, banks would offer him a lower margin, and thus the monthly installment would be lower.

The process of calculating your creditworthiness is no different from that of a regular mortgage. You also need to have satisfying bank earnings and non-liquidity expenses. But the most important thing, actually the basic one, is the timely repayment of the current (and possibly other) obligation. If someone has had problems with paying the loan installments on time or in some other way has “dirty” their credit history in the meantime, they will be distrustful of the bank and may actually forget about the new loan.

However, it turns out that financial institutions often want to check if the customer is in the habit of repaying the loan on time. In order to verify the reliability, borrowers usually demand that the current loan be repaid for some time (several months). Thus, they defend themselves against taking over an unreliable customer.

Over the past few years, banks’ policies have changed – they are more cautious than before. In addition, some regulations are imposed by the Polish Financial Supervision Authority, including regarding the ratio of installment to average remuneration. It may turn out that someone who once received a loan does not meet the relevant requirements today.

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