How to refinance your home loan: A step-by-step guide.

Out with the old, in with the new – refinancing can be a great money-saver. Replacing your existing loan is a chance to lock in a better interest rate and features you actually need. However, it can be a bit of a process, so you’ll want to know exactly what you’re up for before you start.

Here are the steps you might need to take to get your refinancing sorted.

How to refinance a home loan.

If you’re thinking about how to refinance one of your biggest assets, there’s clearly something missing from your current loan. Common reasons for refinancing include:

• securing a lower interest rate
• finding features that help you pay down the loan faster
• consolidating debt
• accessing home equity to renovate.

There are many different home loans to choose from. Maybe you’re looking for a home loan without the bells and whistles. 

Perhaps you would prefer a loan with features and flexibility – such as an offset account or the option to split your loan between a variable and fixed rate. Knowing exactly what you want will make it easier to find the best loan for you.

Here’s a step-by-step guide to follow when working out how to refinance a home mortgage. 

1. Compare home loans.

If you’re making the effort to refinance, you’ll want to shift to a loan that best suits your needs. Use our refinance calculator to run your numbers, then speak with a ME mobile banker or mortgage broker to determine which loan is right for you.  

Good questions to ask include:

• What are the new conditions of your loan?
• Are there any features you won’t have anymore?
• How long does settlement take when refinancing?

Make sure you’re comfortable with your choice of lender before you apply or transfer your home loan to another bank – making too many applications to multiple lenders can damage your credit score.

2. Make sure it all adds up.

Refinancing can come with a range of costs, so it’s important to factor this in when deciding to refinance.

So, how much does it cost to refinance a home loan? That depends on a range of factors. Some costs to consider include upfront loan fees, exit or discharge fees on your old loan, Lenders Mortgage Insurance (LMI) and mortgage registration fees payable to your state government.

It’s also good to look at how much interest you’ll expect to pay across the lifecycle of your new loan compared to your current loan.

Once you have all the figures available, crunch the numbers to see whether the benefits of refinancing will outweigh the costs.

3. Refinance your home loan.

Refinancing means applying for a whole new home loan – which means completing the paperwork just like you did for your current loan.

You’ll need to provide proof of income (usually a couple of recent pay slips), as well as personal ID. Because you’re already paying off a loan, the new lender will want to see up to six months of statements for your current loan.

Before you put refinancing in the too-hard basket, there are people that can help. A ME mobile banker can help you complete the paperwork and streamline the process.

If you’re refinancing a home loan, it’s likely the new lender will want to value your home. Make sure you understand how the valuation works and what to expect. Some lenders operate using an automated valuation model (AVM), which means they won’t physically inspect the property, while others will want to assess in person.

If your lender needs to physically inspect the property, allow time to spruce things up before it’s assessed, even if that’s just planting some new flowers or painting your letterbox.

4. Prepare for settlement.

If your application is approved, formal loan documents will be drafted and forwarded to you for signing. Be sure to read the paperwork carefully, and speak with your solicitor, mortgage broker or ME mobile banker if you have any questions.

Behind the scenes, your new lender will get in touch with the old lender to organise the loan changeover.

Once your refinancing loan is ready to go, your new lender will receive the title deeds to your home (previously held by your old lender) and the old loan will be paid out on the settlement day. All you have to do is enjoy a better loan than before (and keep making repayments).

So how long does it take to refinance a home loan? Refinancing is generally a straightforward process, especially if you’ve got all your paperwork on hand and have been keeping up to date with your current loan. 

With these home loan refinancing tips, you could be rocking a new loan within 4 – 6 weeks, hassle-free.

With home loans generally running for many decades, many people also wonder how soon can you refinance a mortgage and how often can you refinance a home loan?

While there are no hard and fast rules on when you can refinance a mortgage, you will have to weigh up the benefits of refinancing against the costs to you. 

Refinance with ME.

Thinking of refinancing your home loan, but not sure where to start? Our ME Mobile Bankers can help you understand your options, speak with one of our home loan experts today.

Find a ME Mobile Banker