Home Loan Discharge Forms – How to Have It Processed
Make Sure You Are Getting the Best Refinancing Deal
Before dealing with the forms for the discharge of a mortgage, you need to make sure that you have done your research and the home loan you will be refinancing to is actually the best option on the market. If you are going to start the whole process to refinance a home loan, then you might as well make sure you are doing it properly and saving as much as you can. A mortgage refinance is not something to take lightly, so you need to start comparing deals before you sign on the dotted line of the new home loan contract.
Featured Home Loan for Refinancing
UBank UHomeLoan – Variable Rate Loan is one of the lowest standard variable rate home loans offered on the Australian Market.
- Interest Rate of 5.83%
- Comparison Rate of 5.83%
- Application Fee of $0
- Maximum LVR With LMI: 80%
- Minimum Borrowing: $100,000
- Maximum Borrowing: $1,000,000
There are many refinancing options available on the market, and some will be better than others. For example, if you are refinancing more than 80% of the value of a property, you will have to pay an LMI premium, which can be quite substantial. However, were you aware of the fact that LMI premiums vary from one lender to another? Since lenders don’t publicise the LMI rates they charge, most people aren’t aware of this fact and end up wasting thousands of dollars on their mortgage refinance because they didn’t shop around a bit.
Likewise, if you are looking to refinance a home loan with a large value, then you can negotiate interest rates with some lenders. Generally, in such cases, it is advisable to seek professional counsel from a mortgage broker, as they have more experience in dealing with lenders.
The valuation of your property can also differ from one lender to another, so why not get the most out of your property by getting multiple valuation offers. This way you can choose the mortgage refinance deal with the highest valuation.
Requesting a Discharge: The Process
Whether you are refinancing or selling the property, you will need to fill out a Discharge Authority Form to request the discharge of the mortgage. Essentially, the discharge of a mortgage means that the lender certifies the fact that the loan has been repaid and they no longer have any hold over the property, thus clearing the title. This way, the new owner, if selling, or lender, if you are signing a mortgage refinance, can stake their claim legally. Note that lenders have their own standardised discharge forms, which you can usually get on their website.
In the case of a sale, you will have to sign the discharge form and ensure that it reaches your solicitor or conveyancer around a month before the sale is completed. They will ensure that everything is taken care of.
If you want to refinance a home loan and are using the services of a mortgage broker, then all you need to do is sign the form and hand it over. They will take care of everything, to ensure that your mortgage refinance process goes smoothly.
On the other hand, if you are handling the process on your own, you will need to take the following steps:
First, you should start the discharge procedure as soon as you submit your refinance home loan application. This way you will ensure that there will be no obstacles in closing the deal on your new home loan. So, you will have to print the form, fill it out and sign it.
Subsequently, you will need to confirm the fax number and address of the lender’s discharge department, so you know where you need to send the form. Add the fax number to the top of the form, as well as the time and date, and then fax it to the discharge department. It’s also a good idea to keep the confirmation your fax machine prints out that the form was sent. Then, make a copy of the form and send it by mail to the address you were given.
Wait 48 hours and call the discharge department to ensure that they received the form and see if they need any more information from you. Since it is not unusual for them to lose forms, you might find that they haven’t received your request. In this case, fax it again and then wait another 48 hours before calling again.
It isn’t the most pleasant experience but it’s better than finding you can’t settle on your mortgage refinance contract because your current lender couldn’t find your discharge request. Also, make sure to show the new lender the discharge form, and even include the original with the contract you are signing. However, keep a copy for yourself. Once the new lender has this form and the refinancing contract is signed, they will call your current lender to establish the details of the settlement.
As you can see, requesting a discharge when you are refinancing isn’t hard but it can backfire if you aren’t used to dealing with lenders and their discharge departments. That is why a mortgage broker is worth his or her weight in gold because you won’t have to be the one pulling your hair out when you hear “we lost the form” for the sixth time.
How Long Does it Take for the Discharge Request to Be Processed?
The last thing you should expect is for a lender to quickly process a discharge request when the borrower is refinancing. After all, the longer they take, the more money they can make by charging you interest. Some lenders will take as long as four weeks, but usually it doesn’t take more than two weeks. However, remember that this timeframe is from the moment they confirm they have received the discharge form.
What are Partial Discharges?
Partial discharges tend to be quite complicated and it is usually a good idea to have a lengthy discussion with your lender before filing a discharge request to ensure that you know all the conditions and what the procedure is. A partial discharge refers to removing the lender’s lien against one property when you have a home loan covering multiple properties. Partial discharges generally occur when you sell one of the properties.
You need to be aware of the fact that one condition that is common among most lenders when it comes to partial discharges is that they require the borrower to maintain the same LVR on the loan as when you first applied. This means that you will have to pay back enough of the loan for the new LVR to match the previous one. In simple terms, if you purchased two properties valued at $250,000 and financed 80% of their value that means that you borrowed $400,000. If you request a partial discharge, you will need to maintain the LVR at 80%, meaning that your loan should be no greater than $200,000. Of course, this calculation doesn’t take into account an increase in value of the property and is just a simple example.
However, there is no need to worry as your conveyancer will help you with the whole procedure and will confer with the lender directly to restructure the loan.
If you decide to refinance a home loan, it is imperative that you shop around to make sure you are getting the best deal. Once you have decided on a mortgage refinance option, you will need to make sure you submit your discharge request with plenty of time to spare, so there are no impediments to signing the new loan contract.
Related posts:
- UBank UHomeLoan (Variable Rate)
- UBank UHomeLoan (Fixed Rate)
- Who is Suited to a Variable Rate Home Loan
- UBank UHomeLoan Review
- UBank Home Loans
- Home Loan Exit Fees banned on new variable rate home loan
- Refinance your Home Loan or Switch to Bankwest
- Switch your Home Loan to NAB
- When Is It Time To Refinance Your Mortgage?
- How To Refinance A Low Doc Loan For A Home Loan
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