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What you will need to refinance your home loan

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Whether you're upgrading to a roomier home or have found a cheap home loan interest rate from another provider, a mortgage refinance could be on your horizon.

Refinancing your home loan is not an easy task, but it’s a must for paying off your loan quicker, getting better interest rates, or accessing equity. If you want a successful outcome, you need to organise all the paperwork and refinance documents you need beforehand.

You might be wondering, ‘what documents do I need to refinance?’ To help you out, we’ve listed down a complete refinance checklist so you don't miss anything important:

Documents needed to refinance a home loan

Make sure you have these documents on hand when you’re applying for refinancing.

Personal information

First and foremost, you need to give lenders your personal ID, it can be one of the following:

  • Driver’s licence
  • Passport
  • Birth certificate
  • Medicare card

Or other proof of identification. You must also provide personal information such as your current address, your date of birth, and contact details. You’ll also be asked to detail your family situation like relationship status and number of dependents as this could affect your income and expenses.

Proof of income and employment

You need to prove that you can make regular payments. This can be in the form of:

  • Recent payslips that document your income
  • Your most recent Group Certificate
  • Your latest Tax Assessment Notice
  • A letter from your employer that confirms your salary

You will also need to provide your employer’s and/or your accountant’s business details. This is to make certain that you have a stable job and can make regular repayments to your mortgage.

If you're self-employed, the paperwork will be slightly different. When refinancing, your lender will likely request two years of business and personal tax returns and Australian Taxation Office assessments as proof of your income.

List of existing loans, expenses, and other liabilities

You'll need to supply your lender with documents outlining the last six months of existing home loans and any other debts.

You'll also need to provide your most recent credit card statement. Other current expenses like copies of bills and bank statements should also be included.

Where possible, ensure you don’t fall behind on repayments of any kind so your refinance can be approved as soon as possible.

Current assets

Lenders will typically require you to provide a list of your current assets. This can include cash and savings, shares, vehicles (cars, boats, motorcycles), high-end jewellery and art, and cryptocurrency. Your lender may also ask for supporting documents. This shows lenders how much wealth you’ve accumulated over time. These assets could help you repay your home loan.

Refinance eligibility requirements 

Different lenders will have different refinancing eligibility requirements, but typically you’ll need to meet the following criteria: 

  • Be an Australian resident or permanent resident 
  • Have more than 20% equity in your home, which will also help you avoid Lenders Mortgage Insurance 
  • Have a good or excellent credit score and history 
  • Be employed and have proof of income 
  • Be over 18 years old 

Check your borrowing power 

If you’re considering refinancing with us, check out how much you could borrow when switching to us by using our borrowing power calculator

Benefits of refinancing your home loan 

Here are just some of the many benefits of refinancing your home loan: 

  • Lower monthly payments – You can get cheaper interest rates and lower your monthly repayments. This will save you potentially hundreds of dollars every month.  
  • Shorten your loan term – Pay your loan off faster and own your own outright. This will also help you maximise your available equity. 
  • Access equity – When you refinance your home, your lender may allow you to access some or all of your home’s equity. You can use this equity to buy an investment property, do renovations on your current property, or however you want. 
  • Get a fixed interest rate – If you have an adjustable-rate mortgage and you want to switch to a fixed rate mortgage, then it can be a good idea to compare rates with other lenders, including the fixed rates your current lender may be able to offer you. See if you can get a lower fixed rate before your interest rate adjustment period. 
  • Debt consolidation – This refers to combining multiple high interest debts like credit cards, car loans, or personal loans into one lower rate debt—your home loan. Doing so could help reduce monthly payments. 
  • Get better loan features – When you refinancing, you can ask your lender to make redraw facilities and offset sub-accounts accounts available. These features can help you save more on your payments. 

Refinancing your home loan has great advantages, but also come with a few drawbacks. Before making a decision, consider your options carefully to get the most successful results. 

Ready to refinance? 

Gather your credit history, existing loan details, and documents regarding your regular income to present to your lender. With just a few documents, you'll be on track to getting your refinance approved.

For more information on refinancing home loans, get in touch with our friendly lending specialists here at loans.com.au!

About the article

As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.

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