How does Real Estate Refinancing work?

How does Real Estate Refinancing work?

February 20, 2021 Admin
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Are you searching for ways to obtain a new loan or to repay an existing one? Are you looking for refinancing options with low rates of interest? As a property owner, you might have heard conversations about 'Refinance' taking place over a cup of coffee. Refinancing is a way of obtaining a loan to pay the existing one. You would come across lucrative interest rates and better loan options while obtaining real estate refinancing.


Different homeowners get into refinancing for different reasons. Some want to have lower interest rates, while others want to make their credit scores better. Another primary goal of refinancing is debt consolidation or to reduce the equity of the loan.


You can use it to increase the existing tenure of the loan. For instance, if you have a mortgage of 30 years and want to change it to a longer tenure you can use the refinance facility. The repayments would just take half of the time than the earlier loan tenure.


Benefits of Real Estate Refinancing

You have to pay a lot of overhead costs while owning a property. You can maximize your return on investment with real estate refinancing. You will observe an increase in the monthly income as mortgage costs will reduce.


Those who don't have adequate money to pay the existing real estate loan, opt for refinancing options.


Factors Lenders Take into Account during Real Estate Refinancing

Investment banks like Resurgent India keep a list of factors to get an exact picture of your risk factors as a borrower. Some of them are as follows:


  • Credit Score: A credit score determines the financial standing of the individual. To obtain conventional refinance a credit score of 660 and above is needed. If you want to obtain the loan at lucrative interest rates, you must have 760 or above. Ask for a free credit report before applying for a loan.
  • Debt to income ratio.
  • Tax returns, assets, and debt statements are often evaluated.
How does Real Estate Refinancing work?

A solid document that reveals your credit risk is prepared and submitted to the lenders. You have to submit some additional documents for faster approval. Some of them have been listed below:


  • Pay Slips.
  • Income tax/Business tax returns for the past two years
  • Proof of any disability income.
  • Pension income proof
  • Recent bank statements
  • Current financial statements from brokerage accounts.
  • Recent retirement account statements.
  • Proof of life insurance policies.

Besides this, you have to show documents with six months of rental statements. Prepare these documents in advance before commencing the refinancing process.


A lot of lenders would ask you to update appraisals before considering the mortgage refinancing. These things can be quite expensive and might make you reconsider your decision.


Associating with the right advisors like Resurgent India is crucial for the approval of refinancing.


How Resurgent India Functions during Real Estate Refinancing?

Lenders adopt a tunnel vision during real estate refinancing. Asset, income, and debt is something that banks usually check before approving it to the borrowers.


Businesses with good debt to income ratio have high chances of refinancing approval from banks. You are an excellent refinancing candidate if the ratio is 45% or below. Get all these parameters checked in advance to avoid issues at later stages.


For rental refinance you need a credit score which is 660 and above. Ask the requirements well in advance from the lenders as the requirements of every bank are separate.


Don't pause your refinancing dreams if it doesn't meet the bank's eligibility criteria.



Real estate refinancing is a good option as you get the opportunity to obtain a new loan to pay the existing one. Go through the terms and conditions before approving the documents.


Keep all the necessary documents handy and get your credit score checked by a finance company. You can take advice from financial advisors if your credit score doesn't meet the eligibility criteria for refinancing.


Don't forget to associate with the top investment bank Resurgent India. The right guidance is what you need during such times.

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