Paperwork required for a mortgage refinance
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.
A home loan is a significant undertaking and it's important to understand what paperwork is required to obtain mortgage approval.
If you're already a homeowner, it's likely you would have gone through this process before - but it always pays to double check that you've completed all the necessary steps before signing on the dotted line.
What are your earnings?
When you first apply for a home loan, you'll need to provide your lender with the details of your income. Likewise, when you're taking out a mortgage refinance, you need to prove that you'll still be able to make regular repayments.
Generally, you'll provide recent payslips that document your incoming, so make sure you have a regular record of these.
Alternatively, you could provide your most recent Group Certificate, latest Tax Assessment Notice and a letter from your employer that confirms your salary.
However, if you're self-employed, the paperwork will be slightly different. When refinancing your home 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.
What are your existing loans?
When refinancing, you'll need to supply your lender with documents outlining the last six months of existing home and personal loans.
If you're sticking with the same provider - for instance, you might be switching from a fixed to variable loan - they'll have your existing loan information, but you'll still need to provide details of personal loans.
Have a credit card? You'll need to provide your most recent statement when refinancing your home loan.
It's a good idea to work on your credit history to ensure your loan will be approved. If you're refinancing, it's likely you've already been able to to demonstrate your ability to make regular payments on any personal debts.
However, it's always good to keep in mind that if you fall behind on repayments of any kind, this could reflect badly on you when applying for a mortgage refinance.
Ensure your existing finances are looking good so your refinance can be approved as soon as possible.
Why are you refinancing?
If you're refinancing to simply get a better home loan deal for your existing property, you'll already have an understanding of the ins and outs of your home.
However, if you need to refinance to upgrade to a better house - or get a cosier home - you'll need to obtain a building report so you're confident a potential new property isn't hiding any nasty secrets!
As well as having a building inspection done on a potential new home, a pest inspection could save you from discovering a critter infestation down the track.
Obtaining a building inspection will help you work out if a property is worth purchasing and if you're paying a fair price for it.
Once you're satisfied a building report rules out any tricky property quagmires that could be expensive and time consuming in the future, you'll be more confident to proceed with a purchase.
Generally, you can make a conditional offer on a property that's dependent on the building report not showing any signs of concern. In order to do this, it's wise to have loan pre-approval first.
So gather together your credit history, existing loan details and documents regarding your regular income to present to your lender.
With an accepted form of identification - such as a passport or driver's licence - you'll be on track to getting approval for your mortgage refinance and achieve a great home loan deal.
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