If you own your own home, chances are your needs may have changed over the years. Refinancing your mortgage may allow you to better-align your financial needs with your lifestyle – whether it be to have access to extra funds to renovate, consolidate debts such as a car or personal loan, or even buy an investment property.
Whatever the case, it’s important to know where to start, and what steps to take.
Your current mortgage and costs
The first step before looking at any new home loan product is to ensure you’re familiar with all relevant information about your current mortgage. While your online account statements will tell you what you’re paying and how often, also go through your original documents to see if you may be required to pay any costs associated with the loan, such as exit fees. These will vary depending on the Terms and Conditions of your current home loan contract.
Do the sums
Work out how much you need to borrow for the new loan. This includes paying off your old mortgage and any additional money required for other things such as renovations, debt consolidation or other expenses. Add any exit fees, and if you do not know of any charges, contact your lender and ask for a ‘payout figure’.
With Compare the Market it’s easy to see home loan products side-by-side and make informed choices. Get an idea for any fees associated with the type of loan you would like and see if you can easily narrow the search in only a few clicks. Chatting to one of our broker partners is also a great way to get expert advice on what options would be open to you.
The broker will be able to walk you through the application process. During this time lending criteria such as income, mortgage repayment history and other financial commitments will be examined.
Once settlement occurs, your new home loan is drawn down – this involves paying off your current home loan using the funds from the new loan.