Mortgage refinance means paying off the existing mortgage of the home or property and getting it refinanced by mortgaging it to another lender. There may be multiple reasons for refinancing your mortgage. An important reason for mortgage refinance is generally the availability of lower interest rate than that you have been paying on the existing mortgage. You may also wish to reduce the term of your loan period, say, from 25/30 years to 15/20 years. You may have some unsecured high interest loans, for example, credit card loans, auto debts or other personal loans and you wish to pay them off once for all. This can be done by consolidating these miscellaneous loans into the mortgage refinance loan. Purchase of a new property, renovation or additions to your home, or education of your children are some of other important factors that may influence your desire to go for mortgage refinance.
The proliferation of a new genre of loan professionals called mobile lenders in Australia has further boosted the mortgage refinance market and make it more competitive and attractive for the mortgage refinance seekers.
Many of these mobile lenders work under and represent mortgage brokers, managers, money lenders, banks or other financial institutions. They advise you about the various aspects of your loans. Many mobile lenders do not charge you an upfront fee. They charge commissions from the lenders they represent. A good mobile lender or a home loan consultant usually belongs to reputed professional bodies such as The Mortgage Institute of Australia (MIAA) or the Finance Brokers of Australia (FBA).
The mobile lenders have brought a great selection of refinance options with a large array of new mortgage refinance services, products, accessories and menus. They have liaison with numerous banks and lenders, each one offering several loan schemes or options. If you shop extensively, you are sure to find a scheme that exactly fits your financial goals and needs.
Once you have settled upon a moneylender, the next step is to apply for the loan. Your loan consultant is legally bound to follow a legal procedure that involves a 100 point identification check, besides sighting your original documents. Each document has a certain point value. For example a Medicare card has 25 points, Current passport, Citizen Certificate, Birth Certificate have 70 points each, while Driver’s license, Social Security Card and Tertiary Student Card have 40 points each and Employer and Credit Cards have 25 points each.
You are also required to supply various documents. The most important document is the discharge or debts clearance certificate from your existing lender. Next in importance are the documents showing your income. If you are employed, you need to produce copies of 3 current pay slips and certificates of tax returns for the previous 2 years.
If you are self-employed, you need to provide your personal and business tax returns for the previous two years, besides profit and loss statements and balance sheets of the previous three years. In addition to these, you are also required to supply documents showing your savings records or bank statements, investment documents, share certificates, rental income and so on. You need to produce your credit records, the loan statements including auto loans, credit card and personal loans, store accounts and so on for the past 6 to 12 months. Certain other documents may include Council Rate notices about your existing property and records of renovation work such as agreements with the contractors, council approved building plans and insurance and so on.
The application process having been completed, you may be asked to pay application fees which may usually include survey or evaluation fee, discharge fee, mortgage repayments or interest rates, life insurance premiums and so on. These fees may vary from lender to lender A good lender will try to reduce this burden upon you as much as possible.
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