Posted by: islamicfinancingnews | July 30, 2012

Some reasons to refinance Islamic mortgages

There are several good reasons to consider refinancing Islamic mortgages which could include moving from a variable rate mortgage to a fixed rate mortgage to take advantage of the current low interest rates, extending the term of the loan to reduce your monthly loan payment and free up more cash for other needs, or consolidating other debts into one lower monthly payment.

In addition to the loan application, you’ll need to organize documentation to help your Islamic finance lender review your financial situation and assess your equity in the home. Additional information will include such items as income verification, copies of bank statements, tax returns and details of your existing mortgage. Of course, a credit report is necessary as well as a search of title to your property to make sure there are no outstanding liens registered on title. You’ll also need a current property appraisal. Usually, your mortgage broker or lender can suggest a qualified appraiser in the area to complete this requirement quickly and help speed up the process.

Always review the terms of the new mortgage with your lender before you sign any documents to ensure you’re getting the benefits of a lower interest rate and fully understand the conditions of the loan. Remember to ask about the administration costs that are ultimately part of any refinance process. Whatever the reason for refinancing Islamic loans, the end result should benefit you.

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