Refinancing your home loan can be a smart way to make sure your loan continues to suit your needs — but knowing where to start can sometimes feel overwhelming.
Whether you’re looking for a more competitive interest rate, different loan features, lower repayments, access to equity or simply want to see what else is available, refinancing doesn’t need to be complicated.
With a little preparation — and the right support — you can make the process much simpler.
Here are five tips to help take the stress out of refinancing your home loan.
1. Understand why you want to refinance
Before comparing home loans, think about what you actually want your new loan to achieve.
Your priorities may include:
- Finding a more competitive interest rate
- Reducing your repayments
- Accessing different loan features
- Consolidating eligible debts
- Accessing equity for renovations, an investment or another major expense
- Reviewing whether your current loan still suits your circumstances
Knowing what matters most to you can make it easier to compare your options and find a loan that better suits your needs.
A lending specialist can help you review your current loan, understand your goals and explore suitable options from a range of lenders.
2. Get an idea of your property’s value and equity
Your equity can play an important role when refinancing.
Put simply, equity is the difference between the current value of your property and the amount you still owe on your home loan.
For example, if your property is worth $800,000 and your remaining home loan balance is $400,000, you have approximately $400,000 in equity.
Keep in mind that a lender will generally arrange or rely on its own valuation as part of assessing your application, so your estimated property value may differ from the value used for lending purposes.
Understanding your equity position early can give you a clearer picture of your refinancing options, particularly if you’re considering accessing some of that equity.
Your LJ Hooker Home Loans lending specialist can also provide you with a free property report to help you better understand your property and local market.
3. Have your financial information ready
A little organisation can make the refinancing process much smoother.
Depending on your circumstances and the lender’s requirements, you may be asked to provide information such as proof of income, details of your current home loan, living expenses, existing debts and other financial commitments.
It can also be useful to review your credit report before applying so you’re aware of the information lenders may consider when assessing your application.
Rather than trying to work out everything yourself, your lending specialist can explain what information is required and help you prepare your application.
4. Look beyond the interest rate
A lower interest rate can be attractive, but it shouldn’t necessarily be the only factor you consider when refinancing.
Loan features, fees and flexibility can all make a difference.
Depending on how you manage your money, features such as an offset account, redraw facility, additional repayments or the option of a fixed or variable rate may be important to you.
There may also be costs involved in switching loans, including discharge, application or valuation fees, depending on your existing and new lender.
Looking at the overall loan — rather than the headline rate alone — can help you determine whether refinancing is worthwhile for your circumstances.
5. Get support to compare your options
You don’t need to navigate refinancing alone.
One of the simplest ways to reduce the stress is to work with a lending specialist who can guide you through the process from beginning to end.
At LJ Hooker Home Loans, your lending specialist can help you understand your borrowing position, compare suitable loan options from a range of lenders, prepare your application and keep you informed throughout the process.
They can also help identify potential challenges early, which may make for a smoother application process.
Could it be time to review your home loan?
Your circumstances can change over time — and so can the home loan market.
That’s why it can be worthwhile reviewing your home loan periodically to make sure it continues to suit your needs.
Whether you’re looking for a more competitive rate, different features, lower repayments or want to explore the equity you’ve built in your property, a home loan review can help you understand what options may be available.
Ready to see how your current home loan stacks up?
Speak with your local LJ Hooker Home Loans lending specialist. We’ll take the time to understand your situation, explain your options and help make refinancing your home loan simple.
Home Loans Made Simple.
We know loans like we know homes.
We hope you found this article helpful. If you’d like to discuss it further please fill in the form below and we’ll be in touch.
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This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.