Refinancing your current loan could save you thousands
Added on by Etairos Accounting
If you do it well, refinancing your current home loan could save you thousands in repayments. To find out how you could get more from your mortgage, follow this step-by-step guide to refinancing.
What and why?
Refinancing simply means shifting your loan from one lender to another. You might do this to take advantage of a better interest rate or longer loan term, or to access a desirable feature your existing home loan doesn’t offer.The main reasons for choosing to refinance are:
- to get a better deal or rate
- to facilitate home renovations
- to consolidate existing debts
- to buy or build a new home for investment
Where do I begin?
1. Explore the costs
First, work out how much the exit fees or other penalties from your current lender may set you back, and check any costs involved with establishing the new loan. If it looks like it might take you more than two years to achieve any savings, it’s probably not the ideal time for you to refinance.
2. Ask yourself, why?
Why do you really want to refinance? Have your plan of attack clear in your head and once you know what’s involved, be sure it’s something you still really want to do.
3. Research the home loan market
Now’s the time to choose the right home loan, so create a list of features that meet your needs. Meet with an Etairos Finance Consultant to discuss your options.
4. Get the ball rolling
When you’ve decided which loan is best for you, it’s time to submit an application. This process works in a similar way to when you applied for finance the first time around unless your circumstances have changed significantly.
5. The wait for pre-approval
Sit tight – depending on complexity your new lender will usually take anywhere from a few days to a couple of weeks to process your refinance application.
6. Value the goods
Your new lender will need a valuation of your property. While the first valuation is generally free, if you own more than one property additional valuations could cost you $200 to $300 each time – but everything is negotiable and we’ll work to get you the best deal.
7. Approval
Once it’s all approved, your lender will advise you in writing - this is usually called formal or unconditional finance approval. Your broker or lender will then tell a solicitor to prepare the loan documentation on their behalf.
8. Start talking
It’s time to tell your current lender that you are refinancing to a new provider. They’ll be reluctant at first but they forward all the required information to your new loan provider. We can help you with this.
9. Sign on the dotted line
Your lender will send you your loan documents for review and sign. Although they’re lengthy, it’s wise to read all the paperwork, and pay close attention to the specific details of your new arrangement. Involve a solicitor if you think it necessary.
10. Sorting settlement
It’s your new lender’s responsibility to arrange both settlement of your previous loan with your original loan provider, as well as the establishment of your new home loan.Both the titles and the bank’s registration of the mortgage over your property will be exchanged at this stage.
Now you have a brand new loan.
The team at Etairos are friendly and knowledgeable with 20 years’ experience in banking and finance. With a little discussion, planning and some research, see how you might reap the rewards of refinancing over the coming years.
Give us a call, we’d love to hear from you.
