July 01, 2015
The process of refinancing can bring out the love in your current lender
Refinancing your home loan can mean securing a lower interest rate, gaining access to improved loan features, or achieving personal goals like streamlining debt. The process is generally pretty straightforward though there is inevitably some paperwork involved. I can help you streamline the paper chain but it’s still worth understanding what you’re signing and why.
One important - and very exciting - document you’ll be asked to complete as part of a loan refinance is the ‘Loan Security Property Declaration’. This may sound very formal but it simply tells your current lender that you are refinancing your loan. It will explain who the loan is being refinanced with as well as identifying the property secured by your current loan.
Once completed and handed over to your present lender, the Loan Security Property Declaration makes it quite clear that are taking your business elsewhere. And that can trigger an interesting chain of events.
Don’t be surprised if you receive a call from your old lender enquiring about why you are refinancing – and possibly making a tempting offer to entice you to stay. Your Mortgage Choice broker may have alerted you to this possibility but it can often come as a surprise, especially if your lender hasn’t been in touch since the day you first took out the loan.
This is why it pays to think carefully about why you are refinancing and what you hope to achieve from the process. In many cases a short term sweetener from your current lender may not be enough to stop you moving on. I can offer detailed advice on what to consider if your old lender suddenly starts to show some love.