There are many reasons why you might need to transfer your home loan
There are many reasons why you may want to change the ownership of your home. Changing ownership involves transferring the home loan into someone else’s name. There are several reasons why you may be considering transferring your home loan. These include separation or divorce, illness or death, family reasons or a change in financial circumstance.
You cannot transfer your home loan to someone else without lender approval. This is because the lender needs to comply with Responsible Lending legislation and ensure that the loan is not unsuitable for the new person Usually, a lender will require a transfer of the property and a new loan to be taken out at the same time as your current loan is paid out.
When considering a change of ownership for your property, it’s important to understand that it can incur significant costs in some instances. Some costs associated with transferring your home loan include paying capital gains tax, lenders mortgage insurance, stamp duty costs (based on the value of the land and property), discharge and registration fees and legal fees.
If you are buying a new home and you’re particularly happy with your home loan, it is possible to take it with you. This is called loan portability and it means transferring your existing loan to another property without refinancing. This may be possible in cases where your new property meets the requirements set by your lender, with regard to your old home loan.
One of the main benefits of loan portability is that it may help you save money on establishment fees and exit fees. However, some lenders may charge you a loan portability fee.
If you do choose to transfer your mortgage, a restriction you will face is that you won’t be able to change the loan structure, including the number of borrowers and the interest rate.
If you’re thinking about modifying the details of your mortgage, speak to an Aussie Broker who can help you through the process.