Refinancing

Get the right information and advise for your home loans

  • Guide to Refinancing

    Refinancing lets you change your home loan to suit your new circumstances....

  • Loan Process

    Learn about the process involved in refinancing loans.

     

  • Document check list

    What are the documents required for refinancing.

     

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  • Refinancing FAQ

    See the most frequently asked questions about refinancing existing loans.<...

Guide to Refinancing

Refinancing lets you change your home loan to suit your new circumstances.

 

Why Refinance your Home Loan or Mortgage?

If you're no longer happy with your current lender or loan, or your financial situation has changed, it’s time to refinance your existing mortgage. 
Common reasons for refinancing your home loan, investment loan or commercial mortgage include:
  • Home renovations such as refurbishment, remodelling, installing a pool or adding outbuildings.
  • Saving money by refinancing to a mortgage with a lower interest rate or or reduced fee,  and
  • Accessing new loan features better suited to your current situation.
  • Debt consolidation to pay off credit cards, store cards and other loans by rolling them into your home loan.
  • Accessing equity in your home to purchase a car,overseas travel, buy an investment property and other purposes.

What are the options to be considered?

New products are emerging rapidly in the mortgage industray. Mortgage Consultants at PJ Home Loans can help you find a loan and professionally package it so that it suits your current financial circumstances and particular needs. See the the below section for the types of home loan products to be considered:
 

Variable Rate

Standard variable loans are one of the most popular home loans in Australia. Interest rates can go up or down over the life off the loan depending on the official rate set by the Reserve Bank of Australia and funding costs. Your regular loan repayments pay off both the interest and some of the principal. With Standard Variable Rate Loans, you are allowed to make extra repayments. Even small extra payments can cut the length and cost of your mortgage significantly.

One of the disadvantages of having a variable rate home loan is increased loan repayments due to rate rises could impact your household budget. You can also choose a basic variable loan, which offers a discounted interest rate but has fewer loan features, such as a redraw facility and repayment flexibility.

 

Fixed Rate

 

With Fixed Rate Home Loans, the interest rate is fixed for a certain period, usually the first one to five years of the loan. This means your regular repayments stay the same regardless of changes in interest rates. At the end of the fixed period, you can either fix the rate again, at whatever rate your lenders are offering at the time, or move to a variable loan. See our Guides and Tips section to compare the Pros and Cons of Fixed Rate Loans.

 

Split Rate Loans

 

Many customers opt for Split Rate Loans where your loan amount is split, so one part is variable, and the other is fixed. Customers get the flexibility on choosing the proportion of variable and fixed. The good part about Split Rate Loans is that you enjoy some of the flexibility of a variable loan along with the certainty of a fixed rate loan.

 

Interest Only

 

With Interest Only Loans customers need to repay only the interest on the amount borrowed usually for the first one to five years of the loan, although some lenders offer longer terms. Your monthly repayments are lower since you are not also paying off the principal. At the end of the interest-only period, you begin to pay off both interest and principal. These loans are especially popular with investors who plan to pay off the principal when the property is sold, having achieved capital growth. Our Tips and Guides section will give you a good idea of the Pros and Cons of Interest Only loans.

 

Line Of Credit

 

With Line of Credit Loans, you can pay into and withdraw from your home loan every month, so long as you keep up the regular required repayments. Many people choose to have their salary paid into their Line of Credit account. With Line of Credit Loans, you can use your income to help reduce interest charges and pay off your mortgage quickly.  This type of loan is good for people who want maximum flexibility in their access to funds. One of the disadvantages of Line of Credit Loans are, they usually carry slightly higher interest rates.

 

Introductory/Honeymoon

 

Introductory loans offer a discounted interest rate for the first 6 to 12 months, before the rate reverts to the usual variable interest rate. This product was originally designed for first-home buyers, but now available more widely to many types of loans. Most of the lenders offers Introductory/Honeymoon loans, so that customers get lower regular repayments in the initial period to avoid financial.

 

Low Doc

 

Low Doc Loans are popular with self-employed people. These loans require less documentation but often carry higher interest rates or require a larger deposit because of the perceived higher lender risk. In most cases you will be financially better off getting together full documentation for another type of loan. But if this isn’t possible, a low doc loan may be your best opportunity to borrow money.

Loan Process

Learn about the process involved in refinancing loans.

 

 

1 Initial Interview   

This is the first meeting with the client to seek their goals, requirements and purpose for the loan. From the information provided by the clients, PJ Home Loans will discuss the options with the client and find a suitable lender to meet their needs.

 

2 Estimated Timeframe of lodgement 

Your loan application will be lodged with the lender within 24 hours of receiving of ALL required supporting documents and application forms as requested.

 

3 Conditional Approval

Estimated Timeframe 2-3 days.

Since we lodge on your behalf, the lender will send PJ Homeloans a conditional approval letter once it has been conditionally approved.  Upon conditional approval, property valuation(s) will be ordered by the lender (if required).

 

4 Valuation Reports

Estimated Timeframe 3 days.

Valuation report(s) will be received by the lender within 3 days of request. (subject to property access).

 

5 Unconditional (full) Approval

Estimated Timeframe 2 days.

We will receive unconditional approval from the lender within 2 days from receipt of their satisfactory valuation(s). We will then contact you to confirm the unconditional approval.

 

6 Mortgage Documents

Estimated Timeframe 5-10 days.

The lender will send a copy of the mortgage documents to you or the nominated party within 5 days of unconditional approval. You will receive instructions on how to handle the documents.

 

7 Loan Settlement

Estimated Timeframe 2-10 days.

Purchasing a property

Between 2-3 days after you have returned your mortgage documents your solicitor/conveyancer will contact the lender to book settlement.

 

Refinancing

Between 2-3 days after you have returned your mortgage documents the lender will liaise directly with your existing lender (if different) to arrange your property refinance.

 

8 Congratulations

Congratulations! Settlement has been booked and your loan is in place.

 

*Please note, time frames are subject to variation based upon the lender selected, the valuer commissioned and/or the complexity of the loan application.

 

Document check list

What are the documents required for refinancing.

 

 

There is a list of documents required in order to process and approve your home loan. Make sure you bring the documents below to your meeting with your mortgage consultant to help fast-track your loan application. This is a general checklist, so some of the documents may not apply to you.  Our Mortgage consultant will confirm which documents you need based on your home loan type. All documents can be copies unless stated otherwise.

 

Identification

100 points ID is required for all types of home loans.

 

Identity Documetation

Points

Current Passport

70

Birth Certificate

70

Citizenship Certificate

70

Drivers Licence

40

Rates Notice

35

Medicare Card

25

Rates Notice

35

 

Other documents that help build up 100 points include: Credit cards, ATM/Debit cards, Pensioner Concession card, Health Care card, Electricity/Gas/Telephone/Water Bills, Tertiary Student ID card, Letter from Employer etc. Consult with your mortgage consultant to see the points for each identity document.

 

 

Additional Documents For Refinancing

  • Documentation on your existing loan including the date the loan commenced, loan period and any financial penalty payable if you exit the loan early.
  • Statements for the last six months for any existing home loans and personal loans.
  • The most recent Council Rates Notice and building insurance policy on the property or properties being offered as security.
  • Credit cards:
  • If you have credit card debt, statements for the last six months. 

If you don’t owe anything on your credit card, the most recent statement.

 

Additional Documents For Borrowers Seeking A Construction Loan

  • A copy of a valid builder’s fixed price tender, including all specifications.
  • A copy of Council approved plans.

Additional Documents If You Already Own A Home

  • Statements for the last six months for any existing home loans or personal loans.
  • Your most recent credit card statement.
  • Copy of the Contract of Sale for the property you’re buying.
  • Statements for the last six months to show your savings/investment history.  (This could include share certificates, savings account statements, term deposit statements, etc.).
  • If other funds are being used for the purchase, evidence showing where the funds are held.
  • If other funds are being given to you, which are not already in your bank account, you will need a Statutory Declaration from the person giving you the money.

Income Details

These documentation is based on your income status.

If you earn a wage or salary

  • The two most recent payslips from your employer (less than 60 days old)  (Ideally these will show the employer’s and employee’s name, year-to-date income figure and other income details

OR any of the following

  • The most recent Group Certificate from your employer (PAYG payment summary or Tax Return)
  • Current employment contract detailing income and salary
  • A letter from your employer outlining how long you have been employed and your income details.

If you are self employed

  • 2 most recent years Personal/Business Income Tax Returns and Notice of Assessment, no more than 24 months ld.

If your Tax Returns and Notice of Assessments are greater than 24 months old, you must still provide them along with either one of the following

  • Internal management accounts supported by Business Activity Statements (BAS) for the past 12 consecutive months verified by the Australian Tax office; or
  • Draft or final financial statements prepared by an accountant.

If you are applying for a Low Documentation Loan you will need:

  • To have been registered for GST and working in the same industry for a minimum or 12 months; and
  • Your ABN and/or Certificate of Incorporation and your BAS for the past 12 consecutive months verified by the Australian Taxation Office; and
  • To sign a Low Doc Declaration which the Bank will provide you with.

If you earn Rental Income

One of the following

  • A letter from the Managing/Real Estate Agent which confirms expected rental income
  • The Lease Agreement
  • Proof of rental income from your bank records or from Financial Statements (for self-employed applicants or companies)

If you receive Government Income (eg: Centerlink and/or Veteran Affairs)

Your latest government advise letter which shows your income/benefit (less than 90 days old)

 

 

Documents For Investors

  • If you already have investment property:
  • Evidence of income such as rental statements.
  • A copy of the tenancy lease.
  • A Council Rates Notice.
  • Copy of the Contract of Sale for the property being purchased.
  • A letter from a property manager indicating likely rent for the new property.

Refinancing FAQ

See the most frequently asked questions about refinancing existing loans.

 

How do I choose the loan that’s right for me?

New home loan products are emerging rapidly in the market. Mortgage Consultants at PJ Home Loans can help you find a loan and professionally package it so that it suits your particular needs and circumstances. 
 
What are the costs/fees involved in switching mortgages?
Penalty fees may apply if you’re paying off your current mortgage early. This can be based on your current mortgage. For example, you might pay an exit fee, if you’re exiting a fixed home loan.  But these may be offset by repayment savings when you refinance home loan.  Consult our mortgage consultants to understand the fees/costs involved in refinancing your existing mortgage.
 
Can I get cash back when I refinance my mortgage?
This depends on how much equity you have in your home. You may qualify for a cash-back refinance. Our mortgage consultants can help you determine whether this is a viable option for you.
 
How will refinancing benefit me?
Refinancing lets you change your home loan to suit your new circumstances. Common reasons why you may want to refinance your home loan, investment loan or commercial mortgage include:
  • Home renovations such as refurbishment, remodelling, installing a pool or adding outbuildings.
  • Saving money by refinancing to a mortgage with a lower interest rate or or reduced fee,  and
  • Accessing new loan features better suited to your current situation.
  • Debt consolidation to pay off credit cards, store cards and other loans by rolling them into your home loan.
  • Accessing equity in your home for overseas travel, purchase a car, investment property and other purposes.
How often do I make home loan repayments – weekly, fortnightly or monthly?
Most lenders offer flexible repayment options to suit your needs. Aim for weekly or fortnightly repayments, instead of monthly, as you will make more payments in a year, which will shave dollars and duration off your loan.
 
How is interest calculated?
Your home loan interest is calculated on the daily outstanding balance of your loan. Making extra repayments or depositing additional funds into your home loan account will reduce the interest payable significantly. Redraw facility in your home loan will help you to redraw these funds as and when you need them.
 
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