The process for refinancing is similar to how you received your current loan in the first place. It involves shopping around different lenders to obtain different rates or simply speaking to a mortgage broker to try and find better loan conditions for you.
There are some requirements and checks that need to be met before being able to refinance:
- Credit history and score
- Payment history on an existing loan
- Income and employment history
- Equity in home
- Home’s current value
- Other debt obligations
Please bear in mind when considering refinancing that the cost of refinancing may be more than the savings provided by a lower interest rate. Refinancing may also impact your credit score; closing your old loan, missing a repayment during the refinance process and making frequent loan enquiries can all negatively affect your credit score and impede your ability to secure a new loan.
To avoid these potential downsides to refinancing your home loan be sure to speak to a mortgage broker or financial advisor who can help provide you with more information and help you to determine whether or not refinancing is the right move for you.