How Does a Free Property Report Help With Your Loan When Refinancing?

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In these difficult economic times, it is essential to make the most of your current opportunities and protect yourself from future increases in interest rates and other financial problems.

A property report can be a vital tool for those looking to refinance their home loan.

A free property report contains information on your title deed, which can help with your loan in several ways. The legal facts such as boundaries and covenants (which you may be unaware of) can interfere with plans for:

  • Refinancing
  • Extending your home due to encroachments over neighbors’ properties or easements
  • Giving neighbors the right to go onto your land

A property report can help you discover the legal truth about your title. Here’s how it helps when refinancing:

1Check Whether Your Property Is Encumbered With Any Easements

Suppose the property you want to refinance and purchase has no covenants. In that case, you need to know if other factors could affect your lifestyle and financial investment in the future, such as easements over neighbors’ land or strip shopping centers.

Once you know of these, you can decide if refinancing is still a viable solution for you or if other financial decisions need to be made to protect your investment and lifestyle. If your property has encumbrances like easements over neighbours’ land, it would be the lender’s policy not to lend more than 80% of the property’s market value.

This clause means that you would need to develop the additional 20% of the purchase price. Easements could also affect your plans for extending or renovating your property by limiting which direction you can build facing and how big you can make it (in some cases).

2Is the Property Worth Refinancing?

In modern times, the requirements for a property report have been brought down by lenders. They use electronic title searches, which can be inaccurate. Therefore, you need to order your search through a registered provider to ensure that you get accurate information before refinancing.

When obtaining a free property report, it is essential to determine whether the property you want to purchase or refinance has any covenants. This information can then be used when refinancing and seeking financial advice about your options.

3Are There Future Plans for the Land?

One of the most common misconceptions about property reports is that they only reveal present or past information about the property. In reality, there is a wealth of future planning data that can be obtained from such reports, such as proposed shopping malls and sewerage works planned for the land around your home.

So before you go ahead with refinancing or buying a property, it is essential to consider all factors about the property which will affect your future financial decisions. A property report can give you access to all of this information to be better prepared for the future.

4Keeping on Top of Your Loan Servicer Company

By checking whether your property has any covenants, it is possible to determine what kind of relationship the homeowner has with the lender through the title deed.

So it is possible to tell whether or not you are dealing with a reputable organization before refinancing. By getting your property report, you can be sure of the following:

  • Save money on your loan (and get advice about how to proceed with refinancing)
  • Learn what relationship exists between the lender and homeowner for planning purposes
  • Determine whether your property has any covenants affecting future lifestyle decisions which need to be planned.

Final Thoughts

Having a free property report will help you when refinancing or buying a home in many ways. Still, it is essential to remember that this report provides more helpful information for future planning and the relationship between your lender and the homeowner.

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