Refinancing your home loan is a big decision that can affect your long-term financial position, so it’s important to make sure you’ve covered everything you need to know before taking that step.
It is important to consider why you’re refinancing. Many people look at refinancing in order to save money or pay off their home loan faster. Whether it’s a lower interest rate that is appealing to you, reducing your regular mortgage payments, consolidating other debts or signing up to a different term, it can be worthwhile.
If you are considering switching, here is what you may need to know.
Many home owners think that once a mortgage is locked in, there's little room to move. In actual fact, you can always speak to your current lender to see if changes can be made to your existing loan. Reviewing your current lending is critical in ensuring you’re getting the best value for your money.
Now might be the right time to review your long-term financial decisions to ensure you are on a good rate. If you have a home or investment loan with another bank it's well worth reviewing your current position to ensure you’re getting the most out of your money.
Whether you want to live in your property or rent it out, we’ve got a range of home loans available to you.
You could consider loans with a transaction account attached – this is called an offset account. The balance in your account is subtracted from your loan balance prior to the interest being calculated, so the more money you have in your offset account, the less interest charged on your loan.
You can also have multiple offset accounts to separate your living and other expenses. That way you can pay for food and bills from one account, but still save up for your holiday or annual bill payments from another account.
The main tip in this environment is to be a good money citizen to ensure bills and debts are being paid on time.
While getting a better deal can be appealing, it’s important to do some careful calculations to make sure it really is saving you money or time off your mortgage. For example, if you’re opting for a new mortgage with lower monthly payments, work out whether this is helping you get closer to paying off your debt.
Here are some points you may want to consider:
When a person applies for a credit card banks have to assess whether the customer can afford to repay the credit card without any financial difficulties.
The Government has introduced changes to the way in which banks make this assessment. Firstly, the bank must be satisfied that the customer can repay the credit card limit at its interest rate within three years.
You may not realise it, but this can affect your borrowing power to purchase a property. Always ensure you review your debt commitments on credit or car leases and reduce or payout debt as early as possible.
If you’re applying for a new home loan, or refinancing, you’ll be asked for a range of information, including your credit card statements.
If you’re refinancing with a new lender (as opposed to refinancing with your existing bank), you’ll need to go through the full home loan process with them, including providing proof of income, personal details, house valuation, and asset and liability details.
Documents you will need when going applying to refinance include:
If you’re considering refinancing, join a bank that’s run to benefit you and take advantage of the competitive home loans rates, award-winning products and personalised service that Australian Unity offers.
Whether it’s understanding terminology, you’re looking to apply or you have a question about your account we can help you with all your banking questions.
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