How the refinance process works – Its not as hard as you think
Results of a recent survey conducted by comparison site Canstar revealed that more than half of the mortgage holders surveyed believed their interest rate could be lower. A further 24% of mortgage holders said they believed their rate was too high. This incredible level of apathy towards their finances suggests that perhaps many believe refinancing is “too hard” or “do not know where to start”.
To help demystify the process the Blackburne Mortgage Broking team has broken down the process to show you that, with the right mortgage broker on your side, its straightforward.
STEP ONE: Meet with your mortgage broker
Arrange to sit down with your broker and run through what your current position is and what you hope to achieve by refinancing. Do you simply want a lower rate? Restructure your lending? Consolidate debt? Access equity for a specific purpose? From the information gathered and based on your goals, the broker will be able to suggest potential lenders and products for you to compare and consider.
STEP TWO: Order a Valuation
Fortunately, mortgage brokers have access with most lenders to order an upfront valuation so you can determine what your equity position is. This may determine what lending options you have available, if at all. It also will speed up the assessment process having this in place.
STEP THREE: Lodge an application
After your valuation is returned and your equity position confirmed your broker can assist you in choosing the loan product to apply for and advise what information and documentation will be required for lodgment. Once everything required is at hand and all the necessary paperwork and compliance documentation is completed the application is compiled and submitted with the lender.
STEP FOUR: Lender assessment
The time it takes for your application to be assessed will depend on the current turnaround times with the lender chosen. Credit policies have toughened in recent years and scrutiny of applications is rather fierce nowadays so it is not uncommon for even the most straight forward applications to have queries raised, but if questions are responded to and additional documents returned to the bank in a timely manner the process is usually quite smooth.
STEP FIVE: Loan Approval and Loan Docs Issued
When your application has been successful with the chosen lender and approval is issued the documentation for the new loan is generated. Many lenders will now email the documents to your mortgage broker for them to print, and some banks even email them to the client directly to be signed electronically, however mortgages are still required to be returned in hard copy. You can choose to either meet with your broker and run through the paperwork together or if you are confident enough, they can forward it to you to complete at your leisure.
STEP SIX: Discharging your existing mortgage
Along with the loan documents, your mortgage broker will also assist you in completing a Discharge of Mortgage with your current bank, though some institutions require the client to contact them direct. Your broker will lodge the discharge and ensure it is processed in a timely manner to coincide with your new loan being ready to settle. The outgoing bank and incoming bank will communicate with each other behind the scenes to arrange the transfer.
STEP SEVEN: Certification and Settlement
Once your signed loan documents are returned to your new lender, they check all is in order and certify your file for settlement. Both lenders agree on a day and time to make the transfer and it goes through seamlessly.
STEP EIGHT: Celebrate your new savings
Once you have your new loan in place on a competitive rate and effective structure you can take comfort in knowing that your finances are working hard for you and you are not paying more than you need to. And remember there are many lenders offering great incentives at the moment to win your business in the form of sizable cash rebates which is another great reason to get onto the refinance you have been promising yourself.
Refinancing is not hard, particularly when you have an experienced and savvy mortgage broker in your corner. So, what are you waiting for?