Guide for Mortgagors Getting Your Refinance Approved by Any Bank loansHub MORTGAGES, YOU AND THE ECONOMY Lending environment in Australia has changed dramatically due to financial uncertainty faced by borrowers from either lack of employment security or property market outlook . And because of these factors, banks are continuously introducing new policies for loan assessment and approval. These unadvertised policy changes are leading to refinance application by borrowers wanting better home loan being declined frequently. With over 100 home loan lenders and thousands of home loan products available to Australians, how are you supposed to narrow down your options and pick the best one, let alone get it approved without the bank constantly asking you to provide additional information! 2 Mortgage borrowers wanting to refinance to a better home loan, should follow these five simple tips. It'll put you ahead of the game, streamline the application process and increase your chances of getting approved, before you even start applying for a better home loan. 3 1.ORGANISE YOUR FINANCIAL RECORDS According to research by the federal government productivity commission, the choice of sticking with one lender ends up costing most borrowers over $31,000 over the life of their loan. This is further supported by ACCC, whose research shows, new to bank borrowers save up to $5,000 per year when compared to existing mortgage customers of the same bank. So, where to start? First, work out what and if you will save by refinancing. To check your potential savings, use our mortgage shredder and discover how much better off you will be by refinancing when compared to your existing loan. If the savings you get in repayment for the first 12 months of the new loan is greater than the cost of the refinance (Bank fee, mortgage transfer and registration fees), change lenders. 4 Then, collect the last six months of your existing home loan statements and review for any missed or late payments. When refinancing, your new lender will be doing the same and if you happen to have missed or late payments, be proactive and tell them why it happened on application. While you're in research mode, you need to review your credit history regularly as well. Any problems listed on your report - such as bill defaults and even prior loans or credit applications you've made - can potentially have a negative impact on your finance application and the type of lender you can get loans with. You should order a free credit report on yourself, two to three months before you need to refinance so that you can check for any adverse comments and resolve any issues ahead of time. 5 2. DO YOUR RESEARCH At last count, Australia had well over 100 home loan lenders and yet, majority of us don’t look past the major banks and their sub brands, St George, Bankwest, Ubank etc when getting a mortgage (fact check: they aren’t different banks, they are just branded differently to Westpac, CBA and NAB). Yes, it may seem easy to go to the bank you have your existing loans at and ask for a better deal. Not according to ACCC, for most borrowers this choice ends up being a costly one over the life of their mortgage, as existing borrower don’t receive the same rate discount as a new to bank borrower does. 5 When looking to change lenders, don’t get seduced by 4 the advertised rates. You need consider whether you 3 want a fixed or variable loan and if there are added 2 bonuses like, cash incentives 1 on offer for refinances from select lenders. 0 Bank A Bank B Bank C Bank D Bank E Bank F You should also review mortgage features and any on-going fees, after all you don’t want to be trapped in a loan where part of your interest savings is eaten up by monthly fees. 6 3. ASK FOR HELP IF YOU NEED IT It’s understandable for borrowers to feel a little overwhelmed by it all, especially since you don’t apply for home loans weekly, monthly or even yearly and the last memory you have is of how much paperwork you needed to complete during the last application. That's where taking advantage of a mortgage platform like loansHub helps, we offer free phone consultation if needed, to help you decide if refinancing is the right choice for you before you apply using our application portal. Not only are we able to compare home loans from over 40 different banks and provide personalised options for you, our technology continuously compares your loan against our panel to ensure you’re always getting a better home loan over the life of your mortgage. Not to mention, our loan application process is completely online and takes less than half the time to complete compared to applications through a bank or mortgage broker. 7 5. PREPARE YOUR SUPPORTING DOCUMENT We've already mentioned the need to prove your existing mortgage conduct, you'll need a few more paperwork than just that when you’re submitting your loan application. Things like proof of income and any assets you may have, as well as evidence of any other existing debt, and expenses you regularly have to deal with. Of course, when changing lenders, you will also need photo ID, recent payslips and potentially your tax returns for the last two financial years. Gathering everything ahead of time will make your refinance journey that much smoother, and help avoid the lender constantly pausing your loan assessment due to missing information. Taking a little time to get prepared before you actually submit an application will put you ahead of the game and ensure that you’ll be saving thousands of dollars with a better mortgage in no time. 8.