Posted by: islamicfinancingnews | August 27, 2013

Some common reasons to refinance Islamic loans

Kita-Disyorkan-Memilih-Islamic-Loan Islamic loans free from Riba are an excellent way for practicing Muslims to purchase a home or refinance their current mortgage and here are a few of the most common reasons to consider refinancing.

  • Shortening the term or length of the mortgage, or in the case of conventional financing, lowering the interest rate on the mortgage can lower the monthly payment and save money.
  • Changing from a fixed rate mortgage to an adjustable rate, or vice-versa, can result in a lower rate and reduce the monthly payment.
  • Using the equity in your home to finance a big expense like a home remodel that can add value to your home, or to purchase a large ticket item.

Consolidating debt is one of the most common reasons for refinancing. Here you can save money by transferring the monthly amounts owing on credit cards or other high interest loans into one lower interest mortgage payment.

You should always consult with your lender before refinancing to learn about the latest rates and terms available. Remember, you may be responsible to pay for an appraisal fee, administration costs, title search and registration fees, so it’s a good idea to make sure refinancing Islamic loans is worth the effort.

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