The Refinancing Process
Few things fit you properly for 30 years straight – you’re not wearing the same clothes, you’ve changed your hairstyle and you’ve probably even adjusted your group of friends. Therefore, it is likely that you will need to refinance your home loan at some stage during your repayment period, but the process can be done in five simple steps.
Seek professional advice from a mortgage broker before refinancing
One of the main reasons why you should seek the advice of a mortgage broker when considering refinancing, is that mortgage brokers have access to hundreds of home loan products being offered by dozens of lenders ranging from the big four banks of Australia to little known specialist lenders who seldom advertise their products, meaning you have to be ‘in the know’ to even know they exist.
A good mortgage broker, such as those affiliated with the MFAA, will closely study your current home loan then examine what is available elsewhere that better meets your needs. They will tell you if its not worth the trouble of refinancing if they feel the home loan you presently have is as good as you can get, and they will tell you if another mortgage is available that will give you a better deal, plus all the costs involved in effecting change and if these costs are worthwhile over the longer term. If it is found that an improvement can be made and it is in your financial interests, your mortgage broker will make all the necessary arrangements with the lender on your behalf to effect change.
New features and lower interest rates can result from refinancing
Home loans Gold Coast in Queensland, or anywhere else, can often be improved on as circumstances change and new features are introduced onto the market. You and your broker may even find that a better mortgage can be found with your current lender. If this is so your mortgage broker will tell you and the appropriate changes can be organised to take place, so you too, can take advantage of such innovation. Before changing to another lender it is always worthwhile telling your current lender why you are effecting change, as you will often find your present lender might be able to accommodate your wishes with another loan within the same establishment where you are known. The first step is to contact a mortgage broker to discuss your needs and your ambitions and take it from there.
Reasons for Refinancing
So how do you know when your home loan needs refinancing because it doesn’t fit, or if you’re just going through a temporary cash flow crisis? Consider some of the most popular reasons for refinancing, and whether a new HSBC home loan could help you achieve these goals:
- Moving home. When you move home you usually have to move home loan, even if your loan has a portability feature, now is a good time to reassess whether the loan truly is working for you, because if your home needs have changed, chances are your home loan needs have as well.
- Access equity. You can access the equity in your home by refinancing your home loan to a larger amount and drawing down on those funds. You can use your home equity for renovations or improvements, for debt consolidation or investments.
- More affordable repayments. If you have found that you are stuck in a high interest home loan, or you simply need to free up some room in your budget you can refinance to a more affordable loan. You can also extend your loan term to reduce your monthly repayment amount as it is now stretched over a longer period.
- Save on interest. If you have paid off a significant portion of your loan you can refinance that smaller loan amount to a shorter loan period. You will find yourself making comparable payments but you will pay your loan off much sooner.
The Refinancing Process
Refinancing with HSBC is as easy as following these five steps:
1 – Contact your lender
While it is important you assess your own situation and needs, when it comes time to choose the right loan product, and decide whether refinancing really is the way to go, contact your lender.
2 – Apply for a refinanced loan
To refinance your loan to a different product you will need to complete the traditional loan application process. This means you will need to provide all of your documentation and income verification again. This is also where you will need to notify your current lender that you are refinancing so they can provide HSBC with all the information they need to process the application quickly.
3 – Loan approval
HSBC will conduct a credit check and verify your documentation prior to approving your refinance loan. Once you are approved you will receive a Letter of Offer which you need to sign and return to the bank.
4 – Settlement
Once your loan application is confirmed and your contract is signed, HSBC will organise settlement for your refinance loan. This can be done through your conveyancer and you will receive confirmation of settlement in writing. This step can take several days to be processed.
5 – Draw down on your new loan
Once your loan is settled the funds for your refinance will be available and your old loan will be paid out with your new HSBC loan. You then become an HSBC customer and start making your repayments to them, while taking advantage of your new loan product and access to your home equity.
Refinancing can be an expensive and time consuming process if you are doing it for the wrong reasons, however, with the help of your lender you can be sure you are making the right decision, and you can make your home loan into just another financial product, rather than a stressful burden.
Related posts:
- Refinancing Equity
- How Mortgage Brokers Can Help with Refinancing
- When Refinancing Doesn’t Make Sense
- Tips for Refinancing Your Home Loan
- How to Refinance an Existing Mortgage with HSBC
- How Does Refinancing Work?
- 5 Steps to Smart Refinancing
- Frequently Asked Questions about HSBC Home Loans and Refinance
- The Very Basic Guide to Home Loan Refinancing
- Can you Save Money by Refinancing
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