It may seem overwhelming switching home loans, but it is worth staying on top of it as you could save thousands as well as take years off your home loan just by finding a better deal.
We have listed just a few ways to help keep the refinancing process as simple as possible to ensure you find the right deal with as little stress as possible.
Do not send in multiple applications
Similar to when you applied for your current home loan, each time you apply with a lender, it will be recorded on your credit report. If you have multiple home loan applications on your report, it may give other lenders the impression that you have been declined, which may affect your chances of getting a home loan.
So, when speaking with lenders, be wary about what you sign up for. It is recommended that you do as much research as possible, but only submit an application form if you intend to go with that lender.
Some lenders have tools, such as a Quick Quote, where you can compare numbers without having to apply. A Quick Quote is a great way to get an idea of how much you may be able to borrow, without actually having to submit an application form, so your credit report is not affected. Take a look at our free Quick Quote on our website.
You can also get valuable information from a Key Facts Sheet. Most lenders enable you to generate them on different loans and gives you information based on your actual loan amount and loan term. Click on the Key Facts tab on one of our home loans to find out what information it contains.
Your property’s value
Don’t be unrealistic about your property’s value as you could be disappointed when it’s time to refinance. It is better to have a realistic, lower price in your head so that you won’t be disheartened when it is valued. You may even be pleasantly surprised if it comes in higher than you thought.
You can speak with your local real estate agent to get an estimate on what the property is currently worth or you can take research into your own hand’s and find out for yourself. Remember lenders are conservative so valuers estimation of what you property is worth is based on actual sales in the past six months. Past sales of properties similar to yours are the best indicator. The free Property Report on our website gives recent sales data for specific suburbs which may help with your research.
Reduce big spending
If you are planning to refinance in the near future, try to keep all big purchases on hold until after you have been approved.
Lenders will assess your finances the same way they did when you applied for your current loans. They will look at your assets, liabilities, income and expenses. So, if you have made any big purchases recently, it could significantly reduce your savings. So, try to hold off on any non-essential purchases until after you have refinanced.
Put off applying for credit cards, increasing limits or applying interest free deals
When determining what you can afford, all available credit limits are taken into consideration as though they were fully drawn. This could impact your affordability with your new lender so minimizing these as much as possible could be a good idea. Don’t forget the limit on interest free deals are also factored in even if the repayment for the foreseeable future is very low. Take a good look at the combined limit of your current cards and reduce them if you don’t actually need the full limit.
Also, any activity like increasing limits and applying for a new card will come up as an enquiry on your credit report so you should try to minimize these as much as possible in the lead up to refinancing your home loan.
Get your paperwork ready
You can reduce the waiting time and speed up the process by providing your lender with all of the required supporting documents in one go. If you start sending in bits and pieces at different times, it will be harder for your lender to keep track of all the individual items and you also run the risk of documents expiring if you send them a few at a time. Start holding onto your payslips, payment summaries, mortgage statements and the like as these will probably be needed.
During the refinancing process, your lender will want to update you on progress and may have questions for you. To keep the process running smoothly, make sure it is easy for your lender to contact you and that you get back to them as quickly as possible. Give alternate phone numbers and email addresses so that you are easily contactable.
Refinancing with the right lender
Whoever is looking after your refinance, whether it is a broker or the actual lender, you need to feel comfortable not only with the loan product but they are easy to deal with and they are doing whatever they can to assist you with the refinance. Getting a sharp rate, great features and excellent customer service can contribute to a pleasant, stress free experience. Visit our website or call State Custodians on 137262, to find out how you could benefits from refinancing to us.