These days, very few home owners stay with the one lender until they have paid off their mortgage. Instead, they tend to refinance their loan every four years to get a better deal. We think that is a very good thing.
If you are paying too much, you can potentially save tens of thousands of dollars by refinancing your loan with a better value lender.
Unfortunately, many borrowers put refinancing a loan in the too hard basket because they think it involves a lot of difficult paperwork.
In reality, nothing could be further from the truth.
When you refinance a loan there are only a handful of documents that you need and they are freely available to any potential borrower.
The documents fall into three broad categories.
This is pretty simple. To help you refinance a loan your lender needs a copy of some photo identification that proves you are who you say you are. Ideally, that means a driver’s license or a passport. If you don’t have either of those, you can use one of the various state-based Proof of Age or Proof of Identity Cards or a combination of other documents agreed by your lender.
If you are an employee this is straightforward. You will need to supply a couple of recent consecutive payslips to confirm your income and employment. You will also need to provide up to three months’ worth of bank statements showing your salary paid by your employer and other income. An internet transaction history will generally do.
If you have income paid to more than one account you will need statements for all those accounts. Alternatively, you could provide your most recent Group Certificate, latest Tax Assessment Notice and a letter from your employer that confirms your salary.
If you're self-employed, the paperwork will be slightly different. When you refinance a loan, you'll need to provide evidence of your ability to make repayments, so your lender will likely request two years of business and personal tax returns and Australian Taxation Office assessments.
Your lender needs to know that you are able to service your current loan, so they will probably require six months’ statements for the loan being refinanced. An internet transaction history with your name and account number is generally acceptable, where the latest transaction should be no more than a month old.
Generally, to refinance a loan you only need to supply your address details but sometimes a lender will require a copy of your latest rates notice as well.
Tags: refinancing your investment property