How does refinancing your mortgage work?

Simply trade in your old mortgage for a new one!  Applying to refinance and/or consolidate your home loan is very much the same process as applying for your initial mortgage. To help jog your memory, an outline of the process is;

  • Contact your home loan consultant and explain what your needs are.
  • Your consultant will ask you some quick questions about your current financial circumstances such as your current income, current debts etc to get an idea of your position as it stands right now.
  • Once this is determined your mortgage broker will research what home loan options are available to you, which home loan products best suit your current situation and of course which mortgage is going to help save you the most money.
  • Once it is confirmed over the phone or by e-mail that you are eligible to proceed, a face to face appointment will be arranged at a time and place that suits you to discuss your loan options.
  • All fees involved in refinancing and/or consolidating your home loan will be explained to you so that you are making an informed decision about changing your mortgage.
  • Once you have decided on the best new home loan option for you, your mortgage broker will prepare the loan application, package it will all the information required and submit your loan application to your chosen lender.
  • Once your loan has been conditionally approved, a valuation on your property will be completed to determine how much your home is worth and therefore how much equity is available to you.
  • When your valuation is returned the loan is sent to a mortgage insurer for approval.
  • On receiving this approval from the mortgage insurer, you are now considered to be formally approved and the lender can instruct solicitors to draw up your mortgage documents.
  • The solicitor will also send instructions to your current home loan lender to let them know you will be discharging your loan.  Quite often your lender will contact you to persuade you to stay with them, but stay strong!
  • Once your mortgage documents have been returned, the solicitors will contact your old home loan lender to book a time to pay out that loan.
  • Your loan is then booked for settlement.  Once settlement of your home loan occurs, your new lender will payout your previous mortgage and any other debts you have nominated to pay out.

If you would like to come in and have a chat about how we can help you, call us on 08 8262 8200.

Author: Yianni Tsimopoulos

Yianni Tsimopoulos is passionate and enthusiastic about finance and the advice profession. After having an active personal involvement in the finance industry for several years, he took the opportunity to become the Managing Director of the Nationwide Group of Companies.

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