What is Refinancing?
Refinancing is the process of obtaining a new home loan to replace an existing one. By refinancing, you can secure a lower interest rate, reduce your monthly payments, or access the equity in your home. There are many reasons why you may choose to refinance your home loan. Some common reasons include:
- Lowering your monthly payments
- Shortening or lengthening the term of your loan
- Accessing the equity in your home
- Consolidating debt
In the current economic climate of official interest rates rising in response to high inflation, many mortgage holders have been turning to brokerages such as Bell Partners Finance to try and secure a better deal on their home loan. There are also many borrowers coming off long-term fixed-rate mortgages who will be looking to refinance. The Governor of the Reserve Bank of Australia, Dr Philip Lowe, has even urged Australians to refinance their mortgages to save on repayments.
“There are some good deals out there and people should hunt them down and take them,” Dr Lowe told a parliamentary committee. “There is competition for new borrowers and there is this discounting and again, people switching. I encourage people to do it.”
Am I Eligible to Refinance My Home Loan?
Eligibility for refinancing depends on various factors such as credit score, income, property type, and the loan-to-value ratio. However, even if you don’t qualify for a traditional refinance, there may be other options available to you through our extensive panel of lenders.
The refinancing process typically involves a credit check, an appraisal of the property, and an underwriting process to determine your eligibility and the terms of the new loan. The timeline for refinancing can vary, but on average it takes around 15 to 30 business days.
At Bell Partners Finance, we are dedicated to providing clients with the highest level of customer service. We will guide you through the process, answer any questions you may have and help you to find the best refinancing option for you.
Is it worth refinancing your home loan?
The answer to this question is usually ‘YES’. However, your individual circumstances should be reviewed by a mortgage broker first. A mortgage broker will be able to provide you with clear information on the advantages and savings of refinancing your home loan so you can make an informed and educated decision.
It is a good time to refinance your home loan when your current loan is not meeting your needs and requirements, or you are on an interest rate that is not competitive in the current market. The best place to start is with a home loan review with a mortgage broker.
You can refinance your home loan at any time, however, you should consider any refinancing costs as well as your plans and goals. Care should be taken if you are currently on a fixed-rate loan or thinking about fixing your home loan rate as break costs may apply. It is important to discuss your plans and goals before making a decision to refinance your home loan. There are no limits as to how often you can refinance your home loan, however, you should take into account the time and costs of refinancing. If you have been placed into a well-priced home loan that suits your needs and requirements, most borrowers would refinance their home loan every 3 to 5 years.
What documents do you need to refinance your home loan?
Refinancing your home loan is a very similar process to when you first took out your loan. You will need to provide information about your current circumstances as well as documents to validate your identity, income, expenses, assets and existing liabilities. These may include driver’s licences, passports, loan statements, transaction account statements, payslips, tax returns, and council rate notices. A mortgage broker will be able to advise you exactly what documents the lender will require.
What are the disadvantages of refinancing?
There are costs associated with refinancing a home loan that need to be taken into account. These include Government fees (such as mortgage discharge and transfer fees) and bank fees (such as application fees and valuation costs). If you are currently on a fixed-rate loan there may be expensive break costs, and if your loan is over 80% of the property value you may need to pay lenders’ mortgage insurance. As a rule, refinancing does not adversely impact your credit rating. But multiple enquiries for credit over a short period of time and late payments on existing loans can negatively impact your credit score. It is important to seek advice from a mortgage broker to help go to the right lender first and minimise the number of enquiries on your credit file.
Why Choose Bell Partners Finance?
At Bell Partners Finance, we are committed to providing our clients with the best loan options, excellent customer service and industry expertise. We have a team of experts that are familiar with the various government schemes and regulations across Australia. Our team of mortgage brokers will guide you through the process, answer any questions you may have and help to find the best home loan option for you.
Choosing Bell Partners Finance means choosing a team of experts who are dedicated to finding the best loan options for you, making the home-buying process as stress-free as possible, and providing excellent customer service no matter where you live. Contact us today to learn more about how we can help you navigate refinancing your home loan.