- What exit fees or penalties will be payable to your current lender – such as deferred establishment fees (DEF) – when you refinance? If you refinance to the same lender, the DEF is usually waived.
- What upfront costs do you have to pay to establish the new loan?
- a lower interest rate
- switch to a different product that your current lender won’t provide
- streamline all of your loans to one lender?
- Create a ‘shopping list’ of the features you want
- Meet with your mortgage broker to discuss options
- you’re refinancing with the same bank – in which case, you won’t need to provide as much paperwork
- your credit record has been impaired
- your income stream has changed
- your liabilities have changed
- you have no equity in your property
If you are refinancing to a new financier, you need to inform your current lender of your decision to refinance, so they can forward all required information to your new loan provider.
Step 6: Pre-approval
The new lender will take between a few days and a few weeks to process your refinance application.
Your new lender will arrange to value your property or properties if you have more than one. Generally, the first valuation is free, but the lender will often charge $200–$300 for valuations on any additional properties.
Step 8: Finance approval
At this point your lender will advise you in writing of your loan approval – this is generally called formal or unconditional finance approval. Your broker or lender will then instruct a solicitor to prepare the loan documents on their behalf.
Step 9: Legally binding
The loan documents will be sent to your solicitor for review, and for you to sign. Alternatively, you can go over the contracts yourself, thoroughly reading the specifics about your individual mortgage arrangement.
Step 10: Arranging settlement
Your new lender will arrange both settlement of your old loan with your previous home loan provider, and the establishment of your new loan. This involves exchange of titles and the bank’s registration of the mortgage over your property.
Step 11: Draw down
You now have a brand new loan! You should receive details on how to manage your new loan, along with all of your new account information, within one week.