If you already own a property, you know that home financing is a long-term process. After a few years of paying off the loan, the question often arises as to how to proceed with follow-up financing. In this article, you will learn everything you need to know to make the transition from the old to the new financing smoothly. We present a simple guide with 7 steps to help you find the best follow-up financing for your home.
In step one, we’ll explain what follow-up financing actually is and why it’s worth looking into it. In the second step, we show you how to analyze your financing situation and what documents you need for this purpose. In the third step, we give you tips on how to find the right time for follow-up financing.
In the fourth step, you will learn how to compare the different offers of the banks and which criteria are important in doing so. The fifth step deals with how to apply for the follow-up financing and what documents are necessary to do so. In step six, we will introduce you to the different types of follow-up financing and explain what advantages and disadvantages they have.
Finally, in step seven, we present you with some tips and tricks on how you can save money on follow-up financing. Read on to find out how to find the best follow-on financing for your home and stay financially secure for the long term.
Step One: Understand what follow-up financing is
If you purchased a home and took out a mortgage, you most likely have a fixed interest rate and a fixed monthly payment. After a few years, however, you may find that the interest rate has generally dropped and that other lending institutions would have better offers. In this case, you may want to consider follow-on financing. A follow-on financing is a new loan applied to your existing loan to extend repayment or lower the interest rate on your existing loan.
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