Are you unhappy with your current home loan? Have you been looking around for refinancing home loan deals just to check your options? If yes, then you surely must have refinancing questions you want answers for.
If you want to know all about how to refinance a home loan, the best course of action is to ask an expert finance broker. They can show you the ropes and may even help you get the best refinance home loan for your financial needs. But if you don’t know what to ask your mortgage broker, feel free to use this list of refinancing home loan questions we have compiled for you. You can get the ball rolling when you know exactly what to ask and what information you need.
ASK A REFINANCE MORTGAGE BROKERWhat is refinance, and how does refinance work?
To refinance a home loan means to take out a new mortgage to pay off your current one. The balance of your existing home loan is offset by the new loan and you repay the new loan or the refinance home loan over time.
Home loan refinancing follows a process similar to obtaining your initial mortgage.
- It begins with your lender or mortgage broker evaluating your current financial goals, mortgage terms, and interest rate.
- They will then determine if refinancing aligns with your objectives, such as reducing monthly payments, accessing equity, or securing a lower interest rate.
- Gather the required documentation.
- Submit an application to your chosen lender so they can assess your eligibility, perform a property valuation if necessary, and provide a loan offer with negotiated terms.
- Once approved, finalise the settlement by signing the loan documents.
- The new loan funds will be used to pay off your existing mortgage, and you’ll begin making payments according to the new loan terms.
If you feel like you are ready to switch to a new loan or lender, we recommend booking an appointment with your mortgage broker. They can liaise with a good lender on your behalf. If you don’t have one yet, feel free to reach out to us! Just click the button below to set an appointment with one of our refinancing brokers.
TALK TO A FINANCE BROKER NEAR MEIs it worth refinancing?
So, why refinance in the first place? Our life may take a certain turn of events, and your current home loan may no longer serve the purpose it once did. Although refinancing means having to switch loans which require heaps of energy and time, the potential savings (thousands’ worth!) can make it all worth the effort. It can put you in a better situation regarding your mortgage.
Refinancing your home loan could be worth a shot if you’re finding yourself in situations like the below:
- trapped in a “mortgage prison” or a situation where borrowers feel trapped in their current home loans due to not having enough equity or capital in their homes
- facing a “mortgage cliff” where a fixed-rate home loans, obtained at record-low interest rates during the pandemic, are set to expire and transition to higher variable rates. Approximately 880,000 households will be affected as their fixed-rate periods end, leading to significant increases in monthly mortgage repayments.
- dissatisfied with your current lender’s restrictions, such as limited loan features or poor customer service
- experiencing major life changes, such as marriage, divorce, starting a family, or a change in employment
- your credit profile has significantly improved since obtaining their original loan: you may qualify for better loan terms and interest rates through refinancing
Refinancing home loan questions you can ask a finance broker Australia
1. How do you refinance a home loan?
You can refinance either with your current lender to a different home loan, or switch to a new lender altogether if you find a better, more flexible loan elsewhere.
2. Do I have enough home equity for a home loan refinance?
Homeowners need to have at least 20% equity in their home to qualify for a refinance home loan and avoid paying Lenders Mortgage Insurance (LMI). You may have more home equity than you think, especially with the fast rise of property values in recent years.
3. How long does refinancing a home loan take?
The duration of refinancing a home loan depends on several factors, including the complexity of the application, the lender’s processes, and the responsiveness of the borrower. Based on our experience, the general timeline takes between 30 to 45 days from start to finish. However, the actual timeline can be shorter or longer.
4. How much does it cost to refinance a home loan?
The costs to refinance home loan depend on your state of area. They may include:
- Discharge fee
- Application fee
- Fixed Rate Break fee
- Valuation fee
- Land registration fee
- Lenders Mortgage Insurance
- Ongoing fees (as charged by your previous lender)
5. How soon can you refinance a home loan?
When can you refinance a home loan, exactly? There is no specific timeline, and you can refinance whenever you see fit. However, holding it off for too long might cause you to pay loyalty taxes, and doing it too soon might require you to pay lofty exit fees and break costs.
6. How do I find the best home loan refinance rate?
The best way to find the best home loan refinance rate is to compare rates from multiple lenders. Some people may try to do this themselves through online research, however, this takes time to compare interest rates, loan features and lender fees to decide which one is best. Mortgage brokers are experts in the home loan industry and know the different types of loans available for you to choose from. Mortgage brokers also have access to a wider range of lenders and have long-standing relationships with lenders that may be able to get you a lower interest rate.
7. How often can you refinance?
If you have been with your current loan provider for less than 12 months, the exit fees associated with refinancing alone may offset any benefits from lower interest or shorter terms from refinance home loan deals.
8. Can you tell me about your panel of lenders?
An expert finance broker has a wide panel of lenders with different mortgage products to offer. Rule of thumb is that the more lenders a finance broker has on board, the more options you have to refinance.
At ZEP Finance, we understand that finding the right home loan is crucial. That’s why we have established a wide panel of lenders, offering you an extensive range of options to choose from. Our strong partnerships with reputable lenders and over 15 years of experience in the industry enable us to find the perfect loan tailored to your unique circumstances.
9. When is a good time to refinance?
You can tell if it is time to refinance when:
- Better rates or refinance home loan deals are in the market
- Your property value and equity has increased
- Your current mortgage term is ending
- You’ve had good credit history
10. What happens at a refinance settlement?
Refinancing is a straightforward process. Your refinance lender will usually do the legwork for you like liaising with your previous lender to discharge your old home loan and receive the title deeds to your home. You will then be expected to make good with your monthly repayments as with your old home loan.
Finding a good mortgage broker to work with
Your refinancing experience could be defined by how good your mortgage broker is at keeping your best interests at heart. How do you find one you can trust?
Ask for a home loan health check
A home loan health check is usually the first step to evaluating whether or not you are eligible to refinance. Sometimes referred to as a mortgage health check, it is a review of your rent mortgage to assess its suitability and determine if there are opportunities to improve your loan structure or save money.
Home loan reviews are a good avenue for a mortgage broker to demonstrate what they can potentially do for you in terms of getting the most fit refinancing solution. When asked, they would be willing to do this for you so they can:
- better assess whether your loan is competitive compared to current market offerings;
- understand how your current loan aligns with your needs;
- examine whether there are opportunities to save money on your home loan;
- provide personalised recommendations to improve your home loan situation; and
- complete the necessary paperwork, and liaise with the lender on your behalf.
Here at ZEP Finance, we can perform a home loan health check for you at no cost! Yes, we will do it for you FOR FREE. Click the button below to set up a home loan health check appointment with our brokers.
GET A FREE HOME LOAN HEALTH CHECKCheck their credentials
A seasoned finance broker has all the right credentials to be answering all your questions. They must be a:
- licensed member of the Mortgage Finance Association of Australia
- member of the Finance Brokers Association of Australia
- holder of Certificate IV in Finance and Mortgage Broking
Furthermore, they should be able to do a refinance home loan comparison for you to get you the most suitable loan option based on their specific needs and financial circumstances. This includes comparing various refinance home loan options available in the market.
Ask them to do a home loan comparison
Here at ZEP Finance we have our home loan rate comparison tool to help compare rates for you in real time. We can also evaluate loan features such as refinance home loan rates, loan terms, repayment options, fees, and any additional features or benefits offered by different lenders.
Check their mortgage broker reviews
Reach out to friends, family, colleagues, or real estate professionals who have recently refinanced their home loans. Inquire about their experiences with mortgage brokers and whether they would recommend them.
Alternatively, you can check their online reviews on platforms like Google My Business or RateMyAgent. ZEP Finance has reviews on the following platforms:
- 270 5-star reviews on RateMyAgent
- Rated 4.9 out of 5 stars based on 93 reviews on Google My Business
- 51 5/5 reviews on Facebook
Got more questions?
Our team is ready to answer all your questions around refinancing and other concerns related to real estate home loans. Book an appointment with us today by clicking the button below.
GET IN TOUCH WITH OUR TEAM TODAY!
