Refinance is the process of taking out a new loan and using it to pay off your existing loan. This can be through the same lender, or a different lender.
As a broker, n1 can help you determine the pros and cons of a refinance. We value your time, so upon your initial consultation with us, one of our consultants will put together a simple but comprehensive value proposition of the refinance.
Reasons to refinance
1. A sharper rate
For most people this is the number 1 thing they look at when evaluating different home loan options. And rightly so, given how fierce the competition in the Australian mortgage market is, there are frequent lender promotions on the market and lenders are always hungry for new business. An average Australian does a refinance every 2-3 years. Just a 0.3% reduction on a $500,000 home loan means a saving of $1500 a year, that’s up to $45,000 over 30 years.
2. Equity release
Equity release is also known as ‘cash out’. You could use the equity that your property has built up from the past and do many things with it. A common investment tactic is to refinance and tap out the equity to use that as down payment for your next property. It is a lot faster than accumulating savings organically.
3. Debt Consolidation
Debt consolidation is one purpose for when you obtain a cash-out. Home loan rates are often the lowest among common household debts. For example personal loan, car loan, credit cards, line of card, overdraft, etc
Why pay 10% per annum on your personal loan every month where you could pay potentially 4 or 5% for the same amount of debt transferred under your home loan?
4. Loan Variation
Another reason for refinance could be that your needs has changed and you prefer a new loan feature (e.g. offset account, redraw, portability) or that you simply want a different loan structure, such as a split loan or changing from variable to fixed.
How to refinance
Exploring the possibilities
We can compare hundreds of loan options across more than 30 lenders on the market, saving you the time and troubles. We know your time is valuable, so leave the hard work to the professionals, we will be more than happy to assist with your inquiries.
The refinance documentations
Once you are happy with the particularly loan product, commencing the actual refinance process is simple. Your n1 broker can guide you through the entire process step by step. We may collect any or all of the below documents to assist you with the application process.
Income documents, such as payslips, employment letter, tax returns, bank statements.
6 months existing home loan statements to ensure a satisfactory repayment conduct.
Council rate notice
Evidence of the building insurance policy you have in place for your home or the property to be refinanced.
Your identification documents