Refinancing your home loan can be a great way to save money and get a better deal on your mortgage in Australia. However, before you start the process, there are some things you need to do to prepare. In this article, we'll outline the steps you should take to get ready to refinance your home loan.
Step 1: Tidy up your finances
Now is the time to make sure your credit score is high, all your loan accounts are paid on time, your employment is secure and you’ve minimised your living expenses. This will make the approval process much easier.
You'll need at least three months of good credit behaviour to improve your chances of approval.
Your credit score is a numerical representation of your creditworthiness, and it's used by lenders to determine whether to lend to you and what interest rate to offer you. We can provide you with your credit report.
If your credit score is low, it may be worth taking some time to improve it before you apply to refinance. Paying off any outstanding debts, making sure all your bills are paid on time, and reducing your credit card balances are all things that can help improve your credit score.
Step 2: Discover your finance people
Working with Mint Equity means we have your back. We’ll fight to get you a discounted interest rate, not just on day 1, but every six months. We take care of all the application and discharge documentation to make the process easy. When it comes to the biggest expense you’ll ever have, it’s worth finding your finance people who will be there for the long haul.
Step 3: Check your property value
The value of your home is an important factor in the refinancing process. Before you start applying to refinance, it's a good idea to get an estimate of your home's value. You can do this by speaking with the team at Mint Equity and we can order a bank valuation at no charge. We can do this even before you decide to refinance.
If the value of your home has increased since you first took out your mortgage, you may be able to refinance at a lower interest rate or even increase your loan amount to pay for renovation or even use the equity in your home as a deposit on an investment property purchase. However, if the value of your home has decreased, you may find it difficult to refinance.
Step 4: Compare home loan lenders in the market
Once you have an idea of your credit score and your home's value, it's time to start shopping around for lenders. Compare the interest rates and fees offered by different lenders to find the best deal for you. Be sure to read the fine print and understand any penalties or fees associated with refinancing. If you are trying to compare home loans through individual banks or comparison websites, it can be difficult to compare apples with apples, so you may want to consider working with a mortgage broker like Mint Equity. We can help you find the best deal and guide you through the refinancing process.
When considering mortgage brokers, make sure they have access to the largest lender panel. For example, Mint Equity has access to over 40 different lenders, thus providing you with more options to choose from.
Step 5: Gather your documents
To refinance your home loan, you'll need to provide documentation. This may include your payslips, tax returns, bank statements, identification and other financial documents. Make sure you have all the necessary paperwork ready before you start the refinancing process.
Step 6: Apply to refinance your home loan
Once you've decided on a lender and gathered your documents, it's time to apply for refinancing. Mint Equity will prepare the application to ensure you have the best chance of approval. The lender will review your application and may ask for additional information or documentation. Be prepared to answer any questions they may have and provide additional information if needed.
Step 7: Discharge your old home loan
If your application is approved, you'll need to sign a new mortgage contract with the new lender. You will also need to discharge the old home loan so the new lender can pay out the old lender. This is generally a simple from that needs to be completed and returned to your current lender. The team at Mint Equity will assist you with this.
Once the refinancing process is complete, your new lender will pay off your old mortgage and you'll start making payments on your new loan.
Refinancing your home loan can be a great way to save money and get a better deal on your mortgage in Australia. There may also be cash back promotions available, so speak to the Mint Equity team to find out if you qualify.