Refinancing your home loan can be a wise decision, as long as you do it right. However, you should not rush this process. We have a couple of tips that should make this task easier for you. Let’s take a look.
Assessing your loan is the first step
In order to get the best home loan refinance deals you need to start by assessing your current home loan. You won’t be able to compare your loan with other offers if you do not assess it first. You can also make a list with all the advantages and the disadvantages of your loan. Take a look at your rates and your interest type and see what your options are.
Comparing home loans
Now that you know everything about your current loan, it is time to look at other home loans as well. Comparing them is important because it will help you find something better than what you have already. You can compare home loans on your own, using the internet, or you can hire a mortgage broker.
Working with a broker will definitely be easier because they have plenty of experience and they know the market better than you do. You just have to tell them what your needs are, and they should find a home loan that is suitable for you.
The costs
If you have decided to give up on your current loan you should see if there are any fees for that. Additionally, getting a new loan might cost you some money as well. A mortgage broker can also help you with that because it is very important to know all the costs before you make a decision.
If you get a loan from the same lender the costs might be lower. Make sure that you research the fees and you calculate the costs. A refinancing calculator can also help you with that.
Applying for a new loan
If you have found the home loan that you need to apply for it. The application can be made via your broker by you can also handle it yourself over the phone. If you have chosen the same lender, the process shouldn’t take that much time because they already have all your data.
However, if you are refinancing your loan with a new lender you will have to offer them all your personal information, including details about your income. Your credit record will have to be assessed and you might be asked about various things, such as your full employment history, superannuation details, and proof of identity and so on.
Getting the approval
If your application has been approved by the lender you should receive a mortgage contract pack. This will include several things, including the contracts that mention the loan amount as well as all the terms of lending.
Your pack should also have the direct debit form which lets you choose the accounts from which the payments will be extracted. There is also a booklet with all the Terms and Conditions that mentions the terms and conditions of your lender. You should read it carefully and make sure that you are aware of all the rules.
Mortgage and Land forms are also part of the pack. This document is from the government and the lender is allowed to register the interest in your property. The mortgage contract pack also contains a discharge form that has to be signed by customers if they are planning to leave their outgoing lender.
You might also receive a Welcome Pack after everything is set with your loan. This pack comes with confirmation for your new home loan and it also has internet banking set-up. A broker could help you when it comes to these packs so that you be sure that everything is in place.
What is home loan refinancing?
A home loan is a big commitment and that is why you might want to get a better deal if this is possible. You might get a better offer from your lender or even find a new lender. There are plenty of reasons why you might want to do that, including reducing your monthly repayments and consolidating your debts.
There are few potential disadvantages when it comes to refinancing. Doing a home loan check on a regular basis is recommended because new offers become available constantly, and you can always find a better deal. In this situation, home loan refinancing will help you consolidate your debts.