While refinancing is pretty straightforward it can still throw up some surprises so here are six steps to smooth refinance sailing.
Let’s face it, dealing with home loans, lenders and finances can be stressful, but it’s important to stay on top of it because you could save thousands of dollars and years off your home loan just by keeping on top of things and ensuring you’re getting the right deal for you.
While the refinancing process is pretty straightforward, it can still throw up some surprises so here are a few tips that will help smooth out the process.
Limit your applications
Each time you apply for a loan it’s marked on your credit history. If you apply for multiple loans it might reflect poorly on you and lead other lenders to think that you’re being declined, so do your research and decide who you want to go with before making any applications.
Be realistic about your home’s value
Don’t be deluded about your home’s value. You can get an idea of what your property’s worth in the current market by asking local real estate agents to value it, which will give you some indication before you go down that path with a lender and end up disappointed.
Save the splurges
Lenders work out your ability to repay a loan by assessing your income and expenditure. Making any big purchases around the time of refinancing could be the difference between loan approval and decline, so hold off on non-essential large purchases if you can.
Time is money
Time certainly can be money when it comes to home loans. If you’ve chosen a new lender make sure you know how long it will take to discharge your mortgage from your current lender and arrangement settlement with your new one so you’re not caught out!
Provide all paperwork
There are lots of i’s to dot and t’s to cross when refinancing your home loan. Help make the process easier for both yourself and your lender by submitting all the supporting evidence they need in one go, and on time. Be thorough! Sending through bits and pieces at different times can lead to things being misplaced or expiring, which will drag out the process.
Lack of communication can cause delays, so make sure you’re contactable and responsive. If you take several days getting back to your lender on something, then you should expect this to push back your settlement time.
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