Avoid these common mistakes and refinancing your home loan should be a simple, trouble-free experience. Successfully navigating the refinancing process can enable you to take advantage of better rates and features, as well as provide finance for a renovation, construction or property purchase.
Mistake #1: A history of arrears
Lenders want to avoid taking on risk, which is why they ask for at least six months of loan statements in order to check your conduct. They won't be impressed with missed/late repayments or going over the limit on any lines of credit, so wait until you have six months of clean history before making an application.
Mistake #2: Too many credit inquiries
Every time you submit an application to a lender, it is recorded on your credit report. When the lender sees a number of applications they wonder why your application hasn't yet been approved by another lender - this may be all the reason they need to decline the application. It's our business as your mortgage broker to know how the criteria varies among different lenders and which lender you will have most success applying to.
Mistake #3: Not thinking ahead
When shopping for a new loan, you're probably looking for one that will suit your needs now, but what about a few years down the track? If you move house or take a career break to raise a family, the loan you choose needs to accommodate these life changes.
Mistake #4: Failure to lock it in
If you fail to lock-in the new favourable rate of interest on your new loan, it may increase by the time your loan gets processed. If you wish to lock-in a rate we can offer that facility.
Mistake #5: Not taking costs into account
Sometimes the savings you could make by switching loans are outweighed by the expense involved. Make sure you know what up-front fees you will be charged and conduct a thorough cost-benefit analysis before you go ahead. Let us know if you need us to do this for you.
Mistake #6: Poor paperwork
Not supplying all the supporting documents when putting in your application can send it back down the bottom of the pile and the waiting game will start over again. It's equally important when your loan is approved to review the documents properly before signing for a clear idea of the terms and conditions.
At Clarence Street Mortgages, we are experts at guiding borrowers through the paper chase and explaining what's in the fine print. Give us a call anytime about helping you successfully navigate the refinancing process.