The world of lending is always changing – and the home loan that might have worked for you just a few years ago mightn’t be the best fit now! This is where home loan refinancing can enter the frame. It involves paying out your existing mortgage for a new one, for any number of reasons.
You might be locked into a fixed rate home loan but want to make the most of plummeting interested rates, or just want to extend the life of your current loan. Or you might find yourself in a different stage of life than you were previously, be it a budding family or downsizing, and your current home loan doesn’t fit. You could even be look to take the next step in your real estate journey and take out an investment home loan.
Think this is for you? Here are a few things to speak to your mortgage broker about when home loan refinancing.
How easy is the process?
In most cases, applying to refinance your home loan isn’t much different from applying for a regular mortgage. You’ll often need the same paperwork the second time around as you did when first applying for finance. In fact, if you’re sticking with the same lender, you mightn’t need to provide too many additional pieces of paper as they’ll already be on file.
Of course, if your situation has changed since the last time you applied – particularly if it has been a long time between drinks – you’ll likely need to make this clear. For instance, you might have a different stream of income, become small business operator or have a few more personal loans to your name.
To make sure your application has the best chance of being accepted, it’s worth checking in with your mortgage broker about the type of documents you might need to have on hand. This can make the process a lot easier, and can help your broker find a home loan that works for your scenario.
Are there any extra costs?
One of the things you’ll probably need to have a careful think about is the fees involved with refinancing. The new lender may have a list of upfront charges you’ll need to pay when switching to their services, and your current is likely to have an exit charge in place if it was created before July 2011, like deferred establishment or early repayment fees. There’s also a list of government fees that could enter the picture. Mortgage registration fees, for example, could come into play when switching from one home loan to another.
Your mortgage broker can assist with these fiddly bits and pieces, helping you to compare different home loans and figure out what the costs are going to be, including the repayments on the new mortgage.
You can contact a Smartline Mortgage Adviser on 13 14 97 for home loan advice. Or complete our call request form and we’ll call you!
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.