In your refinancing research you may have come across something known as the Fast Track refinancing process or FastRefi. This refers to a specific type of refinancing, offered by some lenders, that allows the borrower to get their new loan settled in approximately three days if no physical property valuation is required.
Compared to the standard refinancing time of 21-30 days this is significantly shorter.
But what is it that makes this process so fast? And is it always a good option for all borrowers?
This article will answer commonly asked questions about the Fast Track refinancing process and what it means for you as a borrower.
What makes the Fast Track process so fast?
The Fast Track refinancing process is able to be relatively short because a prospective lender agrees to take on your existing debt before the title of the property is transferred to them. This cuts out the time consuming back-and-forth between your old and new lender which would usually occur before settlement.
During the standard refinancing process, your new lender will wait for your old lender to transfer them the title to your property before taking on your debt. This way, your new lender has a legal right to sell your home if you cannot repay your debt. In the Fast Track process, your new lender trusts that you will not default on the loan before they have the legal means to recoup their loss.
Of course, as they are taking on a risk in this process, your new lender will ask you to pay some form of title insurance that will cover their loss if you were to default on the loan before they get their hands on the property title. Some lenders may cover this insurance fee as an incentive to convince you to switch lenders.
Why would I prefer this to the normal process?
Borrowers who are switching to a lower interest rate will find the Fast Track option particularly attractive as it will allow them to start paying less for their loan as soon as possible. This will shorten the time it takes for them to break even on the refinancing costs and start stashing away the savings that come with a lower monthly repayment.
The faster the switch is completed; the sooner the savings will start appearing in your own pocket rather than that of your old lender.
It also means that the process will not drag on for a period of weeks or months, giving a borrower peace of mind that the switch is completed and doesn’t require following up.
- Process is completed faster
- Potential savings begin sooner
- May have to pay title insurance
- Less time to change your mind
Will the Fast Track refinancing process cost extra?
The only reason that the Fast Track refinancing process may cost you extra is if you have to pay for the title insurance fee to cover the lender. If you will have to pay this charge, it is worth recalculating your break even point to see if getting the discounted interest rate early will pay off the extra fees you will be charged.
Who offers Fast Track refinancing?
Some lenders are known to offer the Fast Track refinancing process such as IMB and loans.com.au. If you are interested in a loan from another provider, you should contact this lender and ask if they offer the Fast Track refinancing process.
Your personal circumstances will also affect your eligibility for this process so make sure in this initial contact you are prepared to discuss your current financial situation.
Lenders that offer Fast Track refinancing