In this article, we provide the process to refinancing your home loan, breaking it down into simple layman’s terms. But before we get into that, let us clear up a few common questions about refinancing.
Generally speaking, there are four main reasons to consider refinancing.
We’re currently experiencing a low interest rate period, so there are many competitive home loan products available. Generally speaking, it’s a good idea to review your home loan every two to three years or when your circumstances have changed.
You should always talk to a mortgage broker because our opinion is not biased towards any particular lender or product. (Unlike a bank which will push whatever loans they have available at the time.) And we won’t suggest that you refinance if it isn’t the right move for you.
We’ve explained the when, who and what of refinancing, but what’s the actual process involved? Here’s a simple step-by-step guide.
Before we begin exploring your loan options, it’s important for us to have a sound understanding of where you’re at financially and what you’d like to achieve. We’ll start by reviewing your current home loan and compare it with others in the market. We’ll be here to assist you decide if it’s the right time to refinance your home loan and what features will work best for you.
You may opt to stay with your current lender by negotiating for a better rate or changing to an alternative product; or refinance by switching to another lender offering a better rate or loan features to suit your current circumstances. We’re here to assist you find the right home loan to fit your personal goals and objectives. Then we’ll submit your application.
Your new home loan provider will require a valuation on your property as part of the application process. Keep in mind that their valuation might be more conservative than the market value you estimate.
Fornaro will manage your refinance application with your new lender. The timeframe on this will vary depending ont he lender and complexity of your financial structure. We will be sure to let you know once your new loan has been approved.
Your broker will arrange for you to complete a ‘discharge authority’ form. Your current lender will then provide a payout figure. Your new lender will fund your loan to pay out your current loan provider. If you’re refinancing to consolidate other debts, for example, credit cards or personal loans, these will be finalised with the proceeds of your new loan at the same time.
Once you have your new home loan settled and in place, you will begin making repayments to the new lender. f you need any help managing your new home loan, Fornaro are alwars here to assist you.
We hope you’ll find this guide to refinancing handy, and we would love to help you decide whether refinancing is the right step for you. Whether you are looking to refinance for a better interest rate, to access equity, consolidate debt or for a property investment to build wealth for your future, we can help you to achieve your goals. Please get in touch today!