REFINANCE GUIDE
Refinancing your mortgage may offer many benefits. Keep in mind that when you refinance, you are replacing your existing mortgage with a new one — with new terms, conditions and settlement costs. Having a clear understanding of the refinancing process can help you evaluate whether or not it may be a good solution for you. For a fact sheet contact us on 1800 77 6789
Step 1: Is it time to refinance
If mortgage prices are rising or your home has dramatically appreciated in market value, it may be a good time to consider refinancing your mortgage.
Generally speaking, one of the following conditions needs to be present before you should consider refinancing your mortgage:
- Your home has significantly appreciated in market value.
- You've been making payments on your original 30-year mortgage for less than 10 years.
- You have a number of small high interest loans such as personal loan or credit cards
In areas of the country where home prices have experienced dramatic increases in market value, refinancing can help you take advantage of your increased equity in your home. For example, a cash-out refinancing may make sense if your house has increased in value and you have a high level of consumer debt that you would like to pay off.
The early years of your mortgageRefinancing usually makes the most sense in the early years of your mortgage, when payments are primarily going toward interest. In the later years of your mortgage — as you begin to pay more principal than interest — you may be better off keeping your original loan. Remember, refinancing will give you a brand new mortgage to pay off and will take you back to the beginning of the cycle in which you are paying mostly interest. In some circumstances you may be able to keep your original loan in tact and set up a facility to run in accordance with the original loan.
Refinance or get a home equity loan?As a rule of thumb, if you've been making payments for less than 10 years on a 30-year loan and mortgage interest rates have put unnecessary pressure on your life style, it may be beneficial to consider refinancing. If you are more than 10 years into your loan, a home equity loan may be a better choice for paying debts or converting your home equity to cash. An obligation free consultation will help you to make an informed decision.
Step 2: Assess your needs
Refinancing can provide you with cash that can be used to reduce costly debt, such as credit card balances and personal loans, with a lower-interest rate loan. Learn also about cash-out refinancing.
When refinancing your mortgage, you may have the opportunity to take "cash out" of your home equity. To receive a one-time cash payment during the refinancing process, you'll need get a loan for more than you owe on your principal mortgage balance. Keep in mind that with a cash-out refinancing, you are also increasing your overall level of mortgage debt.
Common uses for cash-out refinancingCash-out refinancing is often used to consolidate high-interest, nondeductible debt. Because your mortgage interest rate is likely to be lower than credit card rates or other types of bank loans, consolidating debt has the potential to reduce your overall monthly debt payments. In addition, some mortgage interest, depending on security and purpose, like investment properties that require capital works may be tax deductible. Credit card interest is not. Another popular use for a cash-out refinancing is to finance a nonrecurring expense — such as purchasing a car, paying for a wedding or financing an education. Such significant events may require you to borrow funds at a higher, nondeductible interest rate. Cash out refinancing can be a possible solution.
Consider all of your optionsIf your home is an important part of your total net worth, consider all of your options carefully before taking cash out of its equity. If you are planning to consolidate debt, you must be committed to reducing your spending in other areas. Consolidating debt and then taking on new consumer debt will simply increase your overall liabilities, while potentially giving you a false sense of financial security. You should always carefully consider which option is most advantageous for you.
Step3: Get organized
Get to know your credit history, gather together your personal financial information and learn more about the different types of mortgages and rates available.
Getting ready ahead of time will help the refinancing process move quickly and smoothly. Take the following steps before you begin.
Review your credit historyIt's a good idea to understand your credit score and review at the beginning of the process. Remember: Even if you have less-than-perfect credit, you may still qualify for a mortgage.
Gather your financial recordsSportzMortgage will require specific financial records to submit your loan. Here's a look at the documentation you'll need to get started. (This can link to application process)
Consider your loan optionsYou'll also want to have a general idea of the types of loans that are available to determine what loan suits you best. Your SportzMortgage representative can help you understand and narrow down your options.
Step 4: Contact us
Call SportzMortgage and talk to a Lending Associate during the early stages of the refinancing process. Your Lending Associate will help you explore your options and determine whether or not refinancing is right for you. Advice you can count on.Your SportzMortgage Associate can help you find the right loan for your needs, explain mortgage rates and special offers, and help you thoroughly consider all of your financing options. You'll work with the same Associate throughout the entire mortgage application and approval process. Your Associate will give you his or her direct line and email address and will remain your primary point of contact from now until settlement.
Step 5: Benefits for customers
As a valued customer, you will experience the convenience you expect with a partner you can trust.
The convenience you expectBy keeping your mortgage with SportzMortgage, it's easy to maintain all of your financial accounts in one place. SportzMortgage Online, our award-winning web site for customers is designed to make your life easier with the click of a mouse.
The partner you trustChoosing SportzMortgage allows you to work with a partner you trust. We are committed to providing you with the highest standard of service before, during and after originating your new loan. Everybody deserves a sporting chance.
Step 6 : The road to settlement
You'll need to make a number of important decisions between applying for the mortgage and settlement of the new loan. SportzMortgage can help you prepare. In addition, if you're interested in adding a home equity line of credit, this may be an ideal time to do so.
When you refinance your new mortgage replaces your old mortgage. Your Associate can help you create a reasonable estimate of how long it will take to complete the refinancing process and settle.
Lock in your interest rateAt some point before your settlement date, you'll need to select a loan type and lock in (or freeze) your interest rate. This will protect you from interest rate increases that may occur while you're waiting to complete the refinancing process.
Consider a home equity line of creditYou can request a home equity line of credit during your loan process. This can be approved at the same as your newly refinanced mortgage, eliminating the need to go through a separate application process at a later time. This means that you will have a line of credit immediately available when your refinance loan is funded for general use - but will cost you nothing until you decide to use it.
The settlement processA team of experts will work together to deliver great service and ensure that your refinancing is processed quickly, accurately and efficiently. In most cases, your Associate will be your primary contact, although you may at times be contacted by other members of our team. (Create link to application process)
Step 7: Service continues
Once your refinancing is complete, SportzMortgage continues to be a valued financial partner. You can easily review, update and manage your account using SportzMortgage Online. Our mortgage administration staff are available to answer your questions during the life of your mortgage, while our financial planning professionals are available to help you find solutions to all of your banking, lending and investment needs.
If you applied for a home equity line of credit during your refinancing application process, we can answer your questions about using and managing your credit. In addition, we are glad to review and potentially increase your credit limit as your needs change. If you applied for a mortgage only, you can add a home equity line of credit or loan at any time by contacting your Lending Associate or calling 1800 77 6789
Online account access and managementOur Champion Home Loan range allows you to use our award-winning online web site for registered customers. This gives you all the features of telephone banking and allows you to access your mortgage and home equity line of credit accounts anytime, day or night. With SportzMortgage Online, you can manage your accounts, see your outstanding balances, and make payments. You can also access any other SportzMortage accounts you may have from the same login.
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