If you are a homeowner in Phuket who was lucky enough to buy when mortgage rates were low in Phuket, you may have no interest in refinancing your present loan. But perhaps you bought your Phuket home when rates were higher or perhaps you have an adjustable rate loan and would like to obtain different terms.

Should you refinance your Phuket property?
If you do refinance your Phuket home, the process will remind you of what you went through in obtaining the original mortgage for your Phuket home. That is because, in reality, refinancing a mortgage is simply taking out a new mortgage with the same bank or a different bank in Phuket. You will encounter many of the same procedures and the same types of costs-the second time around.

Would Refinancing Be Worth It?
Refinancing your Phuket home can be worth, but it does not make good financial sense for everyone. A general rule is that refinancing becomes worth if the current interest rate on your mortgage in Phuket is at least two percentage points higher than the prevailing market rate for properties in Phuket. This figure is generally accepted as the safe margin when balancing the costs of refinancing a Phuket mortgage against the savings.

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No bank in Phuket wants to foreclose on a mortgage. Foreclosure costs the banks in Phuket more money than they can make back from the foreclosure sale. Therefore, lenders in Phuket do not foreclose in order to make money, but only reluctantly as a way of limiting losses on a defaulted loan on a property in Phuket. This is why, if you get behind on your mortgage payments, your bank in Phuket will work with you to devise a practical plan to cure the default and bring the loan current. In order to do so, however, you must stay in communication with your bank and be honest in evaluating your financial situation.

The willingness of the lender in Phuket to work with you to get past your current problems will depend heavily on your past payment record. If it shows consistently timely payments and no serious defaults, you will find the lender in Phuket much more receptive than if you have a record of unexplained chronic late payments.

If you are falling behind in your payments, or know that you are likely to in the immediate future, there are some steps that you should take before talking with the bank in Phuket about alternative payment arrangements.

First, you need to prepare a monthly list of your income and expenses in Phuket, using realistic figures based on your current financial situation. You will also need to put together a complete financial disclosure package, showing your Phuket assets and liabilities, including all debts and monthly payments and when they are due. Pay stubs, unemployment check stubs or other proof of current income in Phuket should be in the package, along with three years’ tax returns.

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