Have you been thinking of refinancing your mortgage but don’t know where to start? Here’s our step by step guide to help you better understand what’s involved in the process.
Refinancing is the process of switching your existing home loan to a different lender or changing loan products. Many Australians choose to refinance to take advantage of benefits such as lower interest rates, to reduce monthly payments, consolidate their debts or to access equity in the value of their home. Refinancing can also supply you with extra cash in the bank!
So, what do you need to consider to decide if refinancing is right for you? And what’s involved in the process?
- Understand why you’re refinancing
Being clear on why you want to refinance and what you hope to achieve should be the first question you ask yourself. Knowing the answer to this will help your broker recommend the best solution tailored to your current situation.
- Comparing home loans
Now that you have a clear picture of why you want to refinance, it’s time to compare home loans. We will discuss available loan options with you that meet your goals and will place you in a better financial setup. Once you’re happy with our proposal, we will ask you to provide required information and supporting documents to get the ball rolling on your application. You can read more on what supporting documents you can generally expect to provide when applying for a home loan here.
- Apply for a new home loan
The refinancing application process works in much the same way as when you applied for your existing mortgage. Upon receipt of your supporting documents, we will prepare and submit your application. We will also order a complimentary valuation to work out how much your home is currently worth.
- Loan approval
Once the lender has these details, they will ask your permission to conduct a credit check to ensure your financial records match those you’ve provided. If your credit history is satisfactory, they will approve you for a loan. Once approved, your new lender will send you a new contract and mortgage documentation for signing.
Congratulations, you’ve now refinanced your home loan! Your new lender will arrange to pay out your existing loan with your initial lender. You will officially start making repayments to your new lender.
Why refinance with a broker? Well, mortgage brokers can offer you far more options than a bank, which allows you to snap up the best deal possible. A good broker will guide you through every step of the loan process and will regularly assess your mortgage to see if the rates you are getting are still competitive, something banks are not obliged to do. Working with a broker can save you time and effort during the application process, and potentially a lot of money over the life of the loan.
So, what are you waiting for? Get in touch with our friendly team today to find out if refinancing is right for you.