Applying for a refinance home loan is a good step to improve your finances. However, there are a few things to consider to fully maximize the advantages of a home loan refinancing. Getting a good grasp on how your home loan works make it easier for you to weigh if merging your personal loans into one amount, repaying it through a refinance and paying back that refinance is indeed a cost-saving move on your end.
Do you think a refinance home loan is good for you and your finances? Be sure to do your research before you opt for this path in getting your finances in order. Here are some information and tips on how you can proceed with a home loan refinance application and if a refinance on your mortgage is indeed the right decision for you.
Your 2019 Guide in Applying for a Home Refinance
Understanding Your Current Home Loan
In the first place, you should be aware of the in and outs of your home loan. In the event that you failed to do so, now is the time to fully understand how your current home loan works. Think about the things that you like and you do not like about your loan makes it easier for you to decide whether it is time to refinance a loan or not. If the disadvantages are more than the advantages, it is indeed the perfect time to find something better.
Take into consideration the interest rates as well as the type of interest that could be possibly applied with your mortgage refinance. It is also important to know whether consolidating your debt or getting access to your equity would make your refinance favorable for your financial situation.
Know Your Options
You can compare home loans online or through the advice of a mortgage broker. Working with a broker gives you access to several banks and lenders that may suit your requirements and your financial situation. Doing your research on your own limits you to sources that you know about. Most of the legwork would be via your broker, if you decide to ask help from one. A mortgage broker, like that from Intellichoice can help you secure the best deals possible for your mortgage refinance.
How Much Does a Refinance Cost?
There are fees involved in terminating a loan earlier than the loan term as well as in applying for a refinance. Some lenders may not require one or the other but it is beneficial to know these extra details involved in a home refinance. Working with a mortgage broker would make it easier for you to determine which is cost-efficient for your refinance application.
The Actual Application
Now that you have weighed your option and has finally decided on which home loan application to take. If you are getting help from a broker, you can simply submit the requirements to them and they will forward it to the lender or bank on your behalf.
Whether you are refinancing with your current lender or with a new one, you should be able to determine if you can afford repaying your new loan or not. Here are the basic requirements that you will need to prepare for your refinance home loan.
- Proof of identity
- Employment proof and history
- Personal details
- Proof of residence
- Superannuation details
- Proof of income
- Latest Notice of Assessment from the ATO or 3 years worth of tax return for self-employed applicants
- Banks statements
It will take at least a week for your application to be processed by the bank or the lender.
After your application has been pre-approved, your lender will then ask a third party to do a valuation on your property. This will determine how much your home is worth and make take a week to process. After valuation, here is where you settle exit fees if you applied a refinance from a different lender.
After being pre-approved and complying to the requirements your bank or lender requested, the formal approval of your home loan refinance comes next. The process will include the following aspects.
Mortgage Contracts – similar to your first home loan, a refinance is binded by a actual contract that indicates the amount of the loan or mortgage refinance, terms of the lending as well as the repayment term, fees and other features included in your loan.
Direct Debit Forms – You can nominate an account where your repayments can be automatically debited as you begin the repayment of your mortgage.
Terms and Conditions – This booklet or document provides an outline of the term and conditions of your loan as set by your lender. Take time to read this because such documents are unique from one lender to another.
Mortgage and Land Forms – This a form issued by the government that permits your lender to register their interest in the property or title that you own. Such documentation also confirms that the mortgage is held by them.
Discharge Form – This is a document you will need to sign if you are getting a refinance from a different lender.
Welcome Pack – This is not always a common feature after a loan approval, but some lenders do welcome their new clients with a Welcome Pack. This usually includes the new loan details as well as the client’s internet banking set-up.
Still having a hard time deciding if a refinance is indeed the best choice for you? Talk to an Intellichoice mortgage specialist to help you decide and make your move in getting your home loan refinanced.
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