Depending on which loan and lender you’re going with, the process of lodging an application to refinance your home loan may be different. It also may require different amounts of paperwork and evidence.
Whether you choose to apply through a broker for your new loan or the lender directly, you will need to supply documentation. Both options will provide you with a list of the documents required and some guidance on the process.
What documents will you need?
- Proof of identity. Usually copies of your drivers’ license or passport.
- Details of your income. A lender will need proof that you are able to make regular repayments on the loan so you will need to supply recent pay slips and Group Certificates. In some cases, the lender will request a letter from your employer stating your salary. If you’re self-employed, you need to supply evidence of your earnings and may need to provide two years’ worth of tax returns and ATO assessments. If you receive income from rental properties or investments you will need to provide proof of these too.
- Details of your living expenses. Expect to be asked to detail your monthly expenses on everything from groceries, bills, pets and home maintenance right down to how much you spend on takeaway food. You’ll also have to supply estimates for cars and transport, how much you spend on insurance, education and childcare, entertainment or leisure and any other expenses you have.
- Bank account statements. To verify your savings and spending habits, the lender will ask to see your bank account statements. Generally they will want to see the last three months.
- Any existing debt. The lender will need to see evidence of your outstanding loans or debts, such as personal loans, HECS/HELP debt or credit card debt. You may be asked to supply statements for the past six months.
- Documents relating to your property. You may also be required to submit your last annual council rate notice and your current home building insurance policy to prove your house is insured.
How long will it take to get assessed?
Depending on the lender, it could be anywhere from a couple of days to a couple of weeks. It really depends on individual circumstances and whether you’ve provided all information required. Should you be approved, your new lender will arrange settlement of your old loan with your previous lender and establish the new loan.
Settlement involves exchange of titles and the bank’s registration of the mortgage over your property, and using your new home loan to pay off your current home loan. If you happened to borrow some extra funds than the cost to pay out your old loan, they are provided to you as directed.
Once this is done, you’ve successfully refinanced and your new loan is now in effect.
This article is intended to provide general information of an educational nature only. This information has been prepared without taking into account your objectives, financial situation or needs. Therefore, before acting on this information, you should consider its appropriateness having regard to these matters and the product terms and conditions. Information in this article is current as at the date of publication. Terms, conditions, fees, charges and credit criteria apply.
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