Are you considering refinancing?
Step-by-step guide to refinancing.
Refinancing can be a great money saver.
Replacing your existing loan is a chance to lock in a better interest rate, and features you actually need.
However it can be a bit of a process, so you’ll want to know exactly what you’re up for before you start.
1. Understand why you're refinancing.
Common reasons for refinancing include:
- Securing a lower interest rate
- Finding features that help you pay down the loan faster
- Consolidating debt
- Accessing home equity
- Sick of the higher interest rate given, for being loyal to your lender
- Fixed term loan coming to an end
Are you looking for a better rate without the bells and whistles, or would you prefer features and flexibility –
like offset accounts or the option to split your loan between variable and fixed rate.
2. Compare home loan options.
If your making the effort to refinance, you’ll want to shift to the best loan possible.
Making to many applications to multiple lenders can damage your credit score.
Use a mortgage broker with multiple lenders available to them, this option will help determine which loan is right for you in terms of the rate and features.
3. Crunch the numbers.
Refinancing can come with a range of costs, so its important to factor this in when deciding to refinance:
- Upfront application and loan fees
- Exit or discharge fees on your old loan
- Lenders mortgage insurance (LMI)
- State government mortgage registration fees
Letting a mortgage broker crunch the numbers, will show you how much interest you will save across the lifecycle of your new loan compared to your old loan.
4. Apply for your new loan.
Refinancing means applying for a whole new loan.
Many put refinancing into the too-hard basket.
Completing paperwork just you did for your current home loan.
A mortgage broker can help you complete the paperwork and streamline the process.
5. Prepare for a valuation.
If your refinancing a home loan, it’s likely the new lender will want to value your home.
Some lenders operate using an automated valuation model (AVM), which means they wont physically inspect the property, while others will want to access in person.
6. Sign on the dotted line.
If your application is approved, formal documents will be drafted and forwarded to you for signing.
Behind the scenes, your new lender will get in touch with the old lender to organise the loan changeover.
7. Enjoy your new home loan.
All you have to do is enjoy a better loan than before.
Refinancing is generally a straightforward process, especially if you’ve got all your paperwork on hand and been keeping up to date with all loan repayments.
Imagine you could be pain-free within 4-6 weeks with your new home loan.
Interested in Refinancing?
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