1.To SAVE interest rate - a new financier will generally offer lower rates from existing financier.
2.To REDUCE monthly installment- With lower interest rate offer by new financier, the monthly installment will be reduced too.
3.To SHORTEN loan tenure- borrowers initially with loan tenure of 30 years can shorten the loan tenure if his/her financial income is more stable.The loan tenure can be shorten if he/she commit a higher monthly repayment.It directly shorten the loan tenure.
4.To CASHOUT home equity- A property value will usually be appreciated through years, when the property value increases and the loan outstanding reduces, it will create an home equity for owner who is also the borrower . When the owner refinances the property, the home equity will be cashed out.
5.To CONSOLIDATE debt- Understandably nowadays consumers are taking more than one borrowing , e.g. car loan, personal loan, credit card outstanding, term loan for business, study loan, over draft etc. Borrower may take opportunity to cash out the home equity and pay off the rest of loan or borrowing to consolidate the debt.
6.To REDUCE home loan account- Borrower may have more than one home loan account, he or she can refinance to cash out one of the properties’ home equity to pay off the rest of the home loan account.
7.To SWITCH from variable rates to fixed rates or vice versa- Variable rates fluctuates according to BLR which is announced by Bank Negara Malaysia (BNM). Whereas fixed rate, the rates is constant.It is common that, fixed rates are much higher than the variable rates at the time a borrower sign acceptance of the offer.
8.To SWITCH from conventional to islamic loan or vice versa- Basically Islamic and conventional financing have no far differences. The major difference is the way or concept of Islamic financing is Syariah compliance. Some Muslim borrowers may change package to adhere to Islamic borrowing concepts.
9.To CHANGE financier- Some borrowers may be experiencing unsatisfied quality of service provided by existing financier. So they refinance is to put their loan account to new financier.
10.To CANCEL MRTA- MRTA made it compulsory by most of the bank in the first time of borrowing of borrowers’ house. Borrower may refinance to other financier so that they allow to cancel the MRTA to get life insurance which is in long term provide better benefits and coverage.