Sometimes property values will dip, so one of the trickier aspects of refinancing is knowing how much equity you have (the current value of your home, minus what you owe). If you bought just a few years ago and borrowed near or to your limit, you may find you have insufficient equity to secure a new loan or that you have to pay additional hefty charges in the form of Lenders Mortgage Insurance as I mentioned above.
If you already have Lenders Mortgage Insurance incorporated in your loan, you will have to take out a new policy with the new lender if you refinance.
If you need to borrow more than 80% of the value of a property, you will be charged Lenders Mortgage Insurance to cover the lender if you default on the loan. It can add thousands to a loan and, what’s more, what you may have already paid won’t be taken into account.