Posted by: islamicfinancingnews | November 16, 2013

Refinancing those Islamic mortgages? Here’s what you need to know

There’s lots of reasons why you’d want to refinance your Islamic mortgages and not all of them are bad. Although there’s the misconception that people only look at this option when they’re in trouble with the existing mortgage, refinancing is a viable option in several other circumstances like when you need to pay for an education or a major renovation that will make your house worth more in the long run. Most of the lenders you deal with will want the same basic information from you that includes:

  • A look at your existing situation. If you’ve lost your job recently or had some other incident that lowered your income, it will be hard for you to refinance. It’s all about the debt to income ratio and if you’ve fallen below that, you might not qualify.
  • Remember that most institutions will want you to put up at least 20% of your home to qualify so you need to be sure you own that much equity. This might not be the case if your home’s value has dipped since you bought it so this is another avenue you’ll want to look at.

Your Islamic loans can be refinanced but you need to be very responsible about what you want the money for.

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