Refinancing your home loan can take hours of work and may end up being a stressful experience – particularly if you’re under pressure to refinance. But there are ways to refi smart!

Maybe you’re nearing the end of your fixed rate period and your existing lender has proposed an astronomical replacement. Or maybe your financial situation has changed, and you suddenly need more manageable repayments. You may have even spoken to a mate at the weekend barbie and realised your interest rate with a big bank is much higher than it should be!

Whatever the reason, you’ll need to find a new lender, get your paperwork together, submit an application and wait for approval. In other words, say hello to a world of stress and a few weeks of sleepless nights.

Or don’t. In reality, there are ways to reduce or even eliminate the stress associated with refinancing. The big tip is to partner up with a lending specialist. They will not only find you a great new home loan – but also reduce your stress by doing the hard work for you and making sure your loan gets approved. Sounds better already.

1. Check your credit score (even if you think you’re fine)

Refinancers probably haven’t checked their credit score in a while, but it’s one of the first things you should get your lending specialist to do (as they will do it anyway – for free). If you’ve been making repayments on your mortgage for years you probably have nothing to worry about, but sometimes things go wrong without you even realising it.

If someone has racked up big debts on your credit card, or there’s an error in your credit report, catching it before you refinance will make the whole process easier. However, if you’re refinancing to consolidate personal debts like credit cards and car loans your lending specialist will explain this to your new lender when they package up your loan application.

2. Take a look at your equity position

Your equity is how much your home is worth, minus outstanding debt. To estimate your equity you just need to:

  1. Work out how much your property is currently worth.Estimate the current price you could get for your home if you sold it today.
  2. Work out how much is left to repay on your mortgage.Check your latest home loan statement.
  3. Subtract your remaining loan debt from the estimated value.This figure is your equity. For example, if you think your property is worth $700,000 now, and you have $200,000 left on your home loan, you have $500,000 in equity.

Having lots of equity makes refinancing easier. The more of the property you own, the smaller your debt and the less risk you are to a lender. And if you’re refinancing to borrow a little more money, having equity is essential.

LJ Hooker Home Loan lending specialists offer on the spot free property reports which will show you the current estimated market value of your home – and the likely bank valuation figure for lending purposes.

3. Work out exactly what you need from the new loan

Before you start applying for a new loan, your lending specialist will take you through a range of options to identify what type of home loan you’re looking for and what features you need.

For many borrowers, an offset account is essential, and a competitive interest rate is always important. You also need to decide whether you want a fixed or variable interest rate. Deciding on this in advance makes it easier to find a suitable loan and switch faster.

4. Go with a faster lender

Every lender is different, and some are much faster at processing applications than others. One way to have a stress-free refinance is to factor in advice from your lending specialist on what lenders will move quicker. For example, some big banks may offer you a shiny cash back offer – but this may come with a higher interest rate and up to 2 months to settle your new loan. This could cost you many dollars in interest.

Lending specialists can also access digital based home lenders (for example LJ Hooker Home Loans Connect) that can have loan offers in your hand within 3-4 days and settle your loan inside 2 weeks! This can involve you not even having to meet anyone in person!

5. Know your limits

You’ll always have an easier time refinancing if you’re trying to borrow within your means. This means working out your equity, how much you want to borrow and estimating your borrowing power.

If you’re trying to borrow more than you can afford, your application will probably get rejected. But the beauty of working with a lending specialist is that they work closely with the lender credit team and will tell you in advance what borrowing capacity you have.

Lending specialists are also strong on helping self-employed borrowers and can offer a range of options including Alt Doc loans with highly competitive rates.


Hopefully our tips have put your mind at ease and got you motivated about refinancing. A refinance can put cash in your pocket for several purposes, lower your repayments, or give you a lower interest rate to help pay off your loan sooner.

Speak with your LJ Hooker Home Loans lending specialist to know the finance options available to you. We’re available online, phone, or in person.

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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.