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Mortgages in Belize: Mortgage Refinancing
The mortgage market in Belize is developing and banks beginning to compete for mortgage borrowers. They are interested in not only the initial mortgage applicants, but also those who have already taken out mortgages from other banks. Banks in Belize advertise various refinance mortgage programs. All of them require borrowers to change their credit institutions. Let’s see what a borrower might gain by changing his or her credit institution and how much it might cost to refinance.
Changing one’s credit organization and refinancing of a mortgage is advisable in the following cases:
- The borrower receives an offer from a bank to lower the interest rate, resulting in reduced monthly payments.
- The bank proposes to increase the length of time of the loan, resulting in a decreased monthly credit load.
The problem of refinancing a mortgage is that the process of refinancing is often more complicated than what is involved in completing the initial mortgage application. In most cases, there are additional costs, which makes the procedure of refinancing overly expensive for the borrower.
The borrower who decides to change banks has to convince the new lender of her or his ability to pay. The new bank which is conducting the refinancing, evaluates not only the solvency of the borrower, but also the viability of the new loan. The borrower is asked to provide not only the documents to obtain a mortgage, but also papers on the ongoing mortgage which he or she would like to refinance.
The list of documents which a bank may ask for include:
- The mortgage contract and the repayment schedule under the contract.
- The primary bank’s reference letter that there are no outstanding monthly payments on the existing mortgage.
- The primary bank’s consent for the borrower to pay off the mortgage ahead of schedule.
Normally, banks do not like to lose borrowers who make their regular payments on time and they may not always give their consent for refinancing at another bank. Please always check the contract if it has a clause that the borrower must obtain the original bank’s consent to refinance the mortgage.
The purpose of this short article is to give borrowers a broad idea of the mechanics of refinancing mortgage loans in Belize.