Mortgage refinancing steps
If you have already taken the steps to homeownership, there is a high chance your financial situation, as well as the market, has changed over time. There are several reasons to refinance your mortgage, whether it is to better-align your financial needs and save money, to access additional funds, consolidate your debts, or you may even be looking to buy an investment property. But this post is all about discussion steps involved in the mortgage refinancing process.
Often the thought of refinancing is daunting, especially when life can get busy, so it is important to know where to start, and what steps to take.
Read these steps and be on your way to a better financial place and lifestyle…
1. Evaluate the costs
First you will need to find out the exit fees or penalties payable to your current lender, as well as any other costs associated with the loan. The exit fee is usually referred to as the Deferred Establishment Fee (DEF), which is the fee charged by your lender when your loan is paid off before a set period. This is normal and is put in place to cover the costs the lender incurred in setting up the loan. The fees will vary for each lender so a good place to start is the Terms and Conditions of your current home loan contract. Generally this can be anything from $!50 upwards, however exit fees have been banned for loans after the 1st of July 2011.
When evaluating the costs, you will also need to determine what the cost is of establishing your new home loan. You will need to work out how much you will need to borrow for your new loan, and don’t forget to factor in renovations, debt consolidation and any other expenses from your new lender.
2. Figure out the ‘why’…
Before deciding on a new loan it is important to figure out why you are looking to refinance. Since purchasing your home you may have seen a change in the market and be looking to take advantage of a lower interest rate, or you may be looking to use the equity in your current property to purchase an investment property.
Another reason people choose to access the equity in their current home is to pay for renovations, education, go on a holiday, and we have even seen some people access their equity to pay for their wedding!
You may even have several properties and are looking to move all your loans across to the one lender or simply be looking to access features in-line with a lifestyle change. Whatever the reason, it’s important to be aware of the ‘why’ so you can make an informed decision and choose the loan that is right for you.
3. Choosing the loan for you
Once you have figured out your top reasons to refinance, you can now find a loan that ticks all your boxes. Make a list of the features that matter most to you and keep these in mind when choosing your new loan, This is a feature that’s available when you use LoanDolphin to refinance your loan. You get to choose the features you wish to have when you refinance.
4. Apply to refinance
Once you have figured out the associated costs, figured out the ‘why’ and decided on the features you are looking for in your next home loan.
It is now time to refinance your loan. This is where LoanDolphin comes in… you can connect with experienced lenders and brokers to ensure you are getting great service and not wasting any time talking to different lenders or worrying if you’re getting the best rate and loan possible. All you have to do is fill out one simple form in 5 minutes and you have access to hundreds of lenders who compete for your business. LoanDolphin even works with the big 4 banks.
Once you have filled out the form, our lenders and brokers will bid for your loan. Yes, they bid for your loan rather than making you do hours of research. This means you get their best offer, often with rates you won’t find elsewhere. If you are able to post your details during business hours you can even receive bids within minutes.
Congratulations you now have a new home loan. Plus, you probably saved hours of time and thousands of dollars in the process. You will now receive all the information you need to manage your new loan, which includes your new account information.
After settlement, your new lender will “draw down” on your loan. This is when your lender will pay off your current home loan using the funds from the new loan.