How to refinance online

How to refinance online

There are now so many tools and resources available on the internet that you can complete the whole refinancing process from start to finish online.

Starting with basic information guides all the way to online-only home loan lenders – the web is your one-stop shop for refinancing needs.

Before you begin sifting through all the relevant information, it is important to understand what you are hoping to get out of refinancing your loan.

It could be to save money, to change loan types, to access different features or any number of different reasons.

Using online tools and resources

Rearview shot of a  businesswoman working with financial graphs on her laptop

Once you have established what your end aim is, you can begin to use the tools and resources available online to inform your home loan search.

Some interesting online resources to look at include Domain’s Home Price Guide, to give you an idea of your property’s potential value, and Veda’s free credit score check which will determine how you will be viewed by a potential lender.

Another very useful tool to use early on is a mortgage calculator. This calculator will help you to visualise how switching to a different home loan will affect your monthly repayment size. It can also help you see how much you will save in total by refinancing.

Doing some background reading online in this exploratory phase is also recommended as it will give you the confidence to compare loans and pick the right one for your needs. There will be articles covering every detail of the refinancing process and all the tips and tricks to look out for. You can start with the below articles that will cover some of the basics .

Comparing home loans

Now that all your background research is complete, you will be ready to start your online comparison of the best mortgages to suit your needs. At this stage, the comparison table will become a very handy tool for you to look at different loans side by side and figure out which one will be the most appropriate for you.

Five year fixed refinancing home loans

You can filter by your loan size, desired loan term, features and providers to narrow down your search to the most relevant loans available on the market. With thousands of options out there, you can’t underestimate the time-saving importance of being able to limit your search to only the most relevant products.

Applying online

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Once you have narrowed down your search to a loan from a lender you’re interested in you can determine whether this lender offers online applications or not. For some borrowers, this may have been an early consideration and an online lender may be purposefully chosen by busy refinancers to limit contact hours needed to complete the process. Another reason an online lender may be specifically chosen is because they often offer low rates and fees. This is because their overheads are smaller considering they do not have the financial burden of running a branch and employing branch staff.

That said, online lenders will still often have a call centre with trained professionals who can assist you with the refinancing process over the phone. Some examples of online lenders include loans.com.au, Reduce Home Loans and Homestar Finance.

Refinancing loans from online lenders

 

It is not only online lenders who will allow you to complete your application online. The Big 4 banks and many other lenders will allow you to submit an application via their website before following up with a phone call or other form of communication.

The best way to streamline any home loan application process, online or through a broker, is to prepare all the necessary paperwork from before you start your search. This includes proof of income, residency and identification documents and information about any assets and liabilities you have.

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Learn more about home loans

Mortgage Calculator, Deposit

The proportion you have already saved to go towards your home. 

Does each product always have the same rating?

No, the rating you see depends on a number of factors and can change as you tell us more about your loan profile and preferences. The reasons you may see a different rating:

  • Lenders have made changes. Our ratings show the relative competitiveness of all the products listed at a given time. As the listing change, so do the ratings.
  • You have updated you profile. If you increase your loan amount, the impact of different rates and fees will change which loans are the lowest cost for you.
  • You adjust your preferences. The more you search for flexible loan features, the more importance we assign to the Flexibility Score. You can also adjust your Flexibility Weighting yourself, which will recalculate the ratings with preference given to more flexible loans.

Mortgage Calculator, Loan Term

How long you wish to take to pay off your loan. 

What happens to your mortgage when you die?

There is no hard and fast answer to what will happen to your mortgage when you die as it is largely dependent on what you have set out in your mortgage agreement, your will (if you have one), other assets you may have and if you have insurance. If you have co-signed the mortgage with another person that person will become responsible for the remaining debt when you die.

If the mortgage is in your name only the house will be sold by the bank to cover the remaining debt and your nominated air will receive the remaining sum if there is a difference. If there is a turn in the market and the sale of your house won’t cover the remaining debt the case may go to court and the difference may have to be covered by the sale of other assets.  

If you have a life insurance policy your family may be able to use some of the lump sum payment from this to pay down the remaining mortgage debt. Alternatively, your lender may provide some form of mortgage protection that could assist your family in making repayments following your passing.

What does going guarantor' mean?

Going guarantor means a person offers up the equity in their home as security for your loan. This is a serious commitment which can have major repercussions if the person is not able to make their repayments and defaults on their loan. In this scenario, the bank will legally be able to the guarantor until the debt is settled.

Not everyone can be a guarantor. Lenders will generally only allow immediate family members to act as a guarantor but this can sometimes be stretched to include extended family depending on the circumstances.

Mortgage Calculator, Loan Purpose

This is what you will use the loan for – i.e. investment. 

Mortgage Calculator, Loan Results

These are the loans that may be suitable, based on your pre-selected criteria. 

Why should you trust Real Time Ratings?

Real Time Ratings™ was conceived by a team of data experts who have been analysing trends and behaviour in the home loan market for more than a decade. It was designed purely to meet the evolving needs of home loan customers who wish to merge low cost with flexible features quickly. We believe it fills a glaring gap in the market by frequently re-rating loan products based on the changes lenders make daily.

Real Time Ratings™ is a new idea and will change over time to match the frequently-evolving demands of the market. Some things won’t change though – it will always rate all relevent products in our database and will not be influenced by advertising.

If you have any feedback about Real Time Ratings™, please get in touch.

Mortgage Calculator, Loan Amount

How much you intend to borrow. 

What is a valuation and valuation fee?

A valuation is an assessment of what your home is worth, calculated by a professional valuer. A valuation report is typically required whenever a property is bought, sold or refinanced. The valuation fee is paid to cover the cost of preparing a valuation report.

What is a redraw fee?

Redraw fees are charged by your lender when you want to take money you have already paid into your mortgage back out. Typically, banks will only allow you to take money out of your loan if you have a redraw facility attached to your loan, and the money you are taking out is part of any additional repayments you’ve made. The average redraw fee is around $19 however there are plenty of lenders who include a number of fee-free redraws a year. Tip: Negative-gearers beware – any money redrawn is often treated as new borrowing for tax purposes, so there may be limits on how you can use it if you want to maximise your tax deduction.

What do mortgage brokers do?

Mortgage brokers are finance professionals who help borrowers organise home loans with lenders. As such, they act as middlemen between borrowers and lenders.

While bank staff recommend home loan products only from their own employer, brokers are independent, so they can recommend products from a range of institutions.

Brokers need to be accredited with a particular lender to be able to work with that lender. A typical broker will be accredited with anywhere from 10 to 30 lenders – the big four banks, as well as a range of smaller banks, credit unions and non-bank lenders.

As a general rule, brokers don’t charge consumers for their services; instead, they receive commissions from lenders whenever they place a borrower with that institution.

How is the flexibility score calculated?

Points are awarded for different features. More important features get more points. The points are then added up and indexed into a score from 0 to 5.

Monthly Repayment

Your current monthly home loan repayment. To accurately calculate how much you could save, an accurate payment figure is required. If you are not certain, check your bank statement.