If there have been changes since you obtained your home loan, it might be a good idea to consider refinancing. A mortgage refinance involves transferring your existing home loan to a different bank and could potentially benefit you by offering lower interest rates and fees, more manageable repayment terms, or superior loan features, leading to an improved financial situation. As the Sunshine Coast trusted mortgage broker team, we don’t take a cookie cutter approach to you and your home loan refinancing solution.
How does refinancing work?
If you’re thinking about refinancing your home loan, the first step is to understand the fees and costs involved in the process. You should check with your current lender to see if they charge any fees for switching home loans. Depending on your current lender and loan, you may need to pay a break fee or other costs to refinance.
Steps to refinance your home loan
- Understanding Your Financial Situation before Refinancing Your Home Loan
Before you think about getting a new home loan, you should take a good look at your current finances and the information that lenders will look at when you apply. One key factor to evaluate is your current property valuation, as this can help you determine if now is the right time to refinance. Contact BrokerCo or your mortgage broker, who will be able to assess your current financial situation, let you know what your exit costs will be, and if there is a financial benefit in refinancing your home loan.
When you apply for a home loan refinance, your lender will assess your ability to repay based on the information you provide and the current industry standards. There are three key factors, often referred to as the “three Ps” that lenders are interested in when evaluating your loan application:
- Purpose: Reason for refinancing. This information can help the lender suggest the right products and features for your needs and assess the relevant risks.
- Person: Are you likely to repay your loan? Lenders use your credit report to evaluate your credit history and decide whether to offer you credit and what terms to offer. Check your credit report carefully for inaccuracies or incomplete information before applying to refinance your home loan.
- Payback (ask Repayments): Can you afford the repayments? If something goes wrong, how will the bank recover the loan?
Switching home loans to a new lender may give you access to extra finance for things like renovating or adding an eligible solar power system. However, loan approval will depend on your personal financial circumstances. By knowing your current financial situation and the things that lenders look at when deciding whether or not to give you a loan, you can decide if now is a good time to refinance your home loan.
- Compare home loan options
When considering refinancing your home loan, it’s important to compare different options to find the best fit for your needs. Before making a decision, it’s a good idea to speak with your current lender and inform them of your plans. This gives them the opportunity to offer you a better rate or loan arrangement. However, if you’re determined to leave, it’s time to conduct thorough research. Make sure to list the pros and cons of the new loan compared to your current one.
- Choosing a home loan lender
The mortgage market is filled with a range of lenders, from major banks to online-only companies. With so many options available, it can be challenging to choose the right lender as there’s no universal choice that fits everyone’s needs.
Picking a lender and filling out a mortgage application can be complicated. Here are some important questions to ask before you make a final decision:
- How long will the whole process take, and what are the major milestones?
- Who will be the main point of contact throughout the process, and how to get in touch with them?
- Which parts of the process can be completed online, and which require in-person meetings?
- How long can I lock in my interest rate, and what happens if the closing is delayed?
If you’re using a mortgage broker, you should also ask:
- How did you choose this lender and rate, and how many others did you consider?
- What fees and commissions will you charge, and who will be responsible for paying them?
- Apply for the new home loan
Once you have researched and found the eligible home loans and terms that match your plans, it’s time to apply for a new home loan. There are three ways to apply for a home loan, which include starting an online application, going to a mortgage broker, or visiting a branch lender to complete your application. During the application process, you will be required to provide your personal and financial information, as well as supporting documents, to help the lender decide whether to approve your application.
- Loan Approval and Settlement
After being approved for your new loan, your lender should provide you with a new contract and other mortgage-related documents. It is recommended that you seek the advice of an independent legal specialist before signing any contract involving large sums of money. Ensure that you personally understand all terms and conditions in the document. If you have any questions or doubts, don’t hesitate to ask.
Once you have signed the documents, your new lender will usually arrange to pay out your old lender and transfer the mortgage and any other accounts associated with your refinancing.
Refinancing might be the right option for you.
If you’re considering refinancing, it’s worth discussing your home loan options with our expert team or seeking an independent assessment of the costs and benefits to determine if it’s the right choice for you. At BrokerCo, we’re committed to helping you understand the refinancing process and debunking any myths surrounding it. We’ll guide you through every step and even take care of the paperwork, including contacting your current bank.
What can BrokerCo do to assist you with a home loan refinance?
If you’re thinking about refinancing, it’s important to do a lot of research and look at different options to find the best deal for your needs. Reach out to the BrokerCo, the refinance experts on the Sunshine Coast, and refinance your home loan with assurance!
How can BrokerCo help?
Refinancing your home loan can be a smart financial move that helps you save money and reduce your monthly repayments. By taking advantage of lower interest rates, accessing equity, and switching to a better lender, you can improve your financial situation and achieve your goals.
If you’re considering refinancing, be sure to do your research and shop around to find the best deal for your needs. Give the team at BrokerCo a call today and refinance your home loan with confidence!