5 Tips for Refinancing Your Home Loan
Home Loan Refinancing Guidance
Thinking about refinancing your mortgage? A refinance can save you money, help you to consolidate debt, or free up some cash – among other things. Plus, it’s a great time to consider changing your loan structure and lender: what suited you when you first bought your place may not suit you now! Check out these handy tips for when you’re ready to take the plunge.
1. Assess your credit
One of the first things you should do when considering a refinance is take a look at your credit score – especially if it’s been a while since you’ve applied for a credit facility. It’s good to know exactly what your score is, as it will inform the strength – or weakness – of your refinance application. If your score is looking a little shabby, there are some steps you can take to improve it before applying. Learn more about how credit scores work here.
2. Decide what you want
Why are you thinking about a refinance? Is it to find a lower rate and save money? Is it to consolidate other debt with your home loan? Is it to change the terms of your mortgage, or to change your lender? Knowing exactly what you want out of a refinance is super important – it’ll help you shop around for the right fit and ultimately choose the right lender and loan program for you.
3. Consider the market
What’s the market doing? Is it booming, or is it in a slump? What interest rates are doing should shape how you structure your new loan. If they’re low, you might want to lock in a fixed rate or even shorten the term of your loan to save some money on interest. If they’re high, you might want to shoot for a variable rate – that way, when they do drop again, you’ll be able to ride the wave down and save. If you refinance with UW Funding, you’ll automatically get our Mortgage Under Management service – where we analyze the market and our list of mortgages to determine where we might be able to save our clients money, free of charge.
4. Get your documentation in order
We all know that home loans mean paperwork, whichever way you look at it. Once you know you want to refinance, start gathering the documentation you’ll need. For UW Funding, typically required documents are listed here. It’s a lot less stressful to get out ahead of the paperwork monster than be rushing around later – especially if you need to request documentation from third parties.
5. Take stock of property prices
Your lender will appraise your property – just like the first time around. That will determine how much equity you have: the more, the better. Higher equity means you’ll be in a better negotiating position, and you’ll be able to take more cash out or add more debt to the loan (if you’re interested in doing those things). Look at what property prices are doing in your area to get an idea of what your place might be valued at. That should give you a reasonable idea of where you stand – and what you might be able to get.
So, there you have it. We hope these five tips help you navigate your refinance with ease – and we can certainly help you do that. UW Funding offers custom home loans to suit your every need and save you money. Get in touch with us today to learn more!