Are Your Mortgage Refinance Documents Prepared?

personOtto Dargan access_timeApril 9, 2019

A number of lenders have recently announced cuts to their fixed rate home loans so, if you’ve been thinking about it, you may want to refinance your home loan soon to take advantage of these deals.

But how do you avoid the rigmarole of preparing for your refinance application?

If you follow this easy-to-follow mortgage refinance documents checklist you’re in for a smooth and fast mortgage refinance.

Checklist for refinancing a mortgage

Basic application and identification documents

Firstly, you’ll need to complete a refinance application with your new lender or, better yet, speak to a mortgage broker who can start the process for you.

You’ll need to provide three forms of identification for your application:

  • Your driver’s licence.
  • Passport.
  • Your birth certificate.

If the above doesn’t apply to you, you can use two of the above IDs in combination with a secondary ID like:

  • Your Medicare card
  • Council rates notice.
  • Credit card or debit card statement.
  • Pensioner concession card.
  • Tertiary student ID.

Financial and credit documents

You typically need to provide evidence of your current debts, including your:

  • Last six months’ home loan statements and transaction history of the home loan being refinanced.
  • Last three month’s unsecured debt statements including credit card statements, personal loan statements, and car loan statements.
  • Last six month’s savings and investment statements (if applicable).
  • Recent council rates notice and building insurance on your home.

Hot tip: Refer to our statements and transaction histories webpage to learn how to obtain these documents easily through internet banking.

Income verification documents

PAYG borrowers

PAYG applicant’s documents are fairly straightforward.

You will require:

  • Your two most recent payslips.
  • A letter from your employer confirming your income.
  • Your last year’s group certificate.

Self-employed borrowers

Self-employed borrowers will need to provide:

  • Two year’s personal tax returns.
  • Two year’s personal tax assessment notices.
  • Two year’s business tax returns (sole trader/company/partnership/trust).
  • Two year’s financial statements (if available).
  • Are there low doc refinance options?

    Self-employed borrowers with limited income evidence can use alternative documents to prove their income with some lenders.

    These alt docs include:

    Additional income documents

    If you have declared secondary income, lenders will want clear evidence that this income is regular and ongoing.

    • Rental income statements from a licensed real estate agent.
    • Proof of share dividends and interest earned on investments.
    • Private pension group certificate.
    • Centrelink benefits (if applicable).

    Hot tip:Typically, the more evidence you can provide supporting your secondary income, the better, especially if your borrowing power is contigent on this income.

    Make sure there are no surprises before you apply

    • Check your credit file to ensure everything is up-to-date and correct – it’s common for borrowers to have a black mark that they don’t even know about.
    • If you are thinking about changing jobs, hold off until you refinance.
    • Similarly, don’t make significant financial decisions or lifestyle changes before refinancing, such as having a baby.
    • You need to have adequate equity in your property, typically, owing less than 80% of the property value (we can order a free upfront valuation on your behalf).

    Why most homeowners don’t refinance and why you absolutely should!

    Most people don’t refinance because they think it’s too hard and time-consuming.

    It doesn’t have to be.

    By preparing your mortgage refinance documents ahead of time and working with a mortgage broker, refinancing can be an easy step-by-step process.

    One of the great benefits of a broker is that they will only ask you for the bare minimum refinance documents required to get approved.

    All that you need to do is provide the correct documents, all in one go and you’re on your way to saving potentially thousands with a sharper rate.

    In fact, if you act fast, we can often reach settlement in as little as 3 weeks because we can stop your lender dragging their heels when discharging your mortgage.

    You’re probably missing out a great deal, right now.

    Did you know that banks will switch unaware customers to a much higher variable rate when their fixed-rate term ends?

    Most lenders simply don’t tell their customers so it falls on you to check your interest rate regularly to ensure you don’t get fleeced.

    If you haven’t checked your interest rate in at least 2 years, it’s likely you’re paying way too much.

    For example, let’s say you had a $300,000 mortgage balance making principal and interest repayments (P&I) on a 5.49% fixed rate.

    You’re coming to the end of your 3-year fixed term and, if you switched to a rate of 3.59%, you would save $339 per month.

    That is $122,124 you’re saving in interest charges over 30 years simply by finding a lender who’s offering a better rate.

    NAB, Bank Of Queensland, AMP, ING, Macquarie Bank, ME Bank, HomeStart Finance, Bankwest, and Suncorp have all slashed their interest rates over the past few months but these rates don’t stay low for long.

    Locking into a fixed interest rate right now seems like a no-brainer, especially considering the significant difference between the lowest and the highest interest rates on offer.

    Speak with one of our specialist mortgage brokers by giving us a call on 1300 889 743 or by filling in our free online assessment form for a hassle-free refinance.

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