Home Loan ToDo List to Refinance for More Money or a Better Deal

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Work out what your current home is worth

Refinancing your loan or increasing your current loan will be very dependent upon the value of your home. We can provide you with a property value report from one of the leading property analysis companies in Australia.  This report will estimate a marketing value and give you a list of similar properties recently sold in the area.

Estimate how much you can borrow

List all sources of taxed and untaxed income

List credit card limits

List monthly finance (e.g. lease, personal loans) repayment excluding your current home loan and any other loans you are paying out with your refinance

Put these numbers into our home loan calculator “How much can I borrow?”

Will you be paying mortgage insurance?

If you are borrowing more than 80% of the purchase price then you’ll be charged mortgage insurance.  The exact amount will vary between banks and depend upon the size and percentage of your loan.  The amount could vary from a few hundred dollars to around 3% of the loan amount.  Call or email us to get a more exact figure

Check if you are in the “ball park”
Calculate whether the money you have plus the loan (less mortgage insurance and other bank fee) is enough to give you need.

This is just a check to see if your dreams are close reality so don’t worry if you are a little short of money because we may be able to help you close the gap.

Know what you are spending the additional money on

The bank will want to know what you are sending the additional money on and sometime will want documented proof.  Some loans exclude certain purposes (eg payment of tax debt).

Check your credit history

If you are refinancing to pay out other debts where you’ve had some payment problems then you should get a copy of your credit history before you apply for a loan.  Poor credit history is common reason for loan declines.  Ask us about getting a report.

Find out which bank fits you

Loan approval conditions vary between banks/lenders.  You’ll need to know which banks have conditions that suit your circumstances.

Find out how the type of property you what to buy will affect your loan

Discuss with us how these different types of property (inner city apartments, suburban home, rural property) may affect your costs and how much you can borrow.

Find the bank which will lend you the most

So far you have been working with rough estimates.  Every bank or non-bank lender has their own home loan calculator and their own rules about how they calculate income, expenses and your available.

As we have the calculator and rules of all our banks and lenders we can find you the one which will lend you the most

Think about IO/P&I; fixed/variable; basic vs full feature loans

Don’t forget about the features of your loan.  There are pros and cons of various features like interest only vs principal and interest loans; or fixed vs variable rate; or basic vs fully feature loans.  Your choice will depend on your circumstances and preferences.  Talk through these choices with us.

Choose the best deal

Once you have a short list of loans you can review interest rates, costs and conditions to see which is best for you.  You can then choose whether you keep the same loan you’ve been using or change to a better one.

Pre-application valuation

The loan will be based on a bank valuer’s assessment of your home’s value.  Often its best to arrange the valuation with the bank before you apply so as you are not wasting time, effort and credit history black marks on an unsuccessful application.  We can arrange pre-application bank valuations with many of the banks.

Apply for a loan

The bank will want an application form and various supporting documents to verify your identity,  income,  savings, some expenses, and current borrowing history.

Obtain Full Approval

Getting a final approval can take quite a bit of follow-up involving multiple calls to the bank call centre and responding to questions by the loan assessors.  Persistence and patience is required.

Sign and Return Your Loan Contracts

Once the loan is fully approved you will be given loan contracts to sign.  Each bank does this differently and there can be quite a lot of paperwork.  You’ll need these documents explained to you by an experienced professional advisor.  Give the contracts back to the bank/lender.

Adjust your Home Insurance

You may need to increase you home insurance and tell the insurer that you have a new home loan.  Most lenders will not settle until you show them proof that the property is insured and the insured knows they are the lender.

Get confirmation from bank they are ready to settle

Make sure the loans area of the bank has your signed documents, they have checked them, and they are happy that everything is correct and complete.  Again more persistence and patience required here.  Don’t assume everything is done and it may take more than one phone call to get confirmation.

Settlement

You won’t usually attend the settlement.  If you are changing lenders then the two lenders will need to exchange money and paperwork.

After you’re settled

Make sure you know how your loan repayments are being paid.  Usually this is a direct debit to a bank account.  Make sure you have enough money in the account.  Payment defaults can lead to substantial late fees.

Minimise your Loan Costs

There are various strategies for reducing your low costs.  Hopefully you’ve arranged a loan which has the features to implement these.  It’s best to talk through this with us before you decide on your loan but now is the time to implement your strategy.

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