The conveyancing team at Hunter Legal & Conveyancing understand the financial details surrounding a property have a significant impact on your life, both now and long term.
Refinancing a property requires careful planning, attention to detail and consistent communication with many parties. If you’re considering refinancing a property, contact our experienced conveyancing team, we can help you achieve the desired outcome as efficiently as possible.
People refinance properties for many reasons, commonly to reduce debt through lower interest rates, debt consolidation, obtaining additional loans for investment purposes, improving loan structure (i.e. additional repayments or offset features) and changing their repayment amounts.
Of course, an early step of refinancing is to research the home loan products from multiple banks to see what rates and products are available (including related costs, like annual mortgage fees, honeymoon periods, exit fees). People may wish to engage a mortgage broker or financial planner to assist with this.
In addition to refinancing a property, people often wish to address their insurance and superannuation accounts simultaneously.
COMMON COSTS ASSOSCIATED WITH REFINANCING A PROPERTY
There are several up front costs when refinancing a property. However, long term, these costs should be outweighed by the savings in interest charges. The upfront costs usually include:
- Discharge of mortgage fee with NSW LRS (current price list here)
- Exiting a mortgage early fee (ask your bank)
- Application and processing fees with the new lender (ask new bank)
- Valuation fees (when a bank requires a valuation on the property)
- Additional mortgage stamp duty (occurs when you increase your loan amount on properties that are not owner-occupied)
- Lender’s mortgage insurance
- Conveyancing costs (we can provide you a quote over the phone)
Additionally each bank can provide calculations that will show the repayments over the life of the loan (at the current interest rate). It’s also wise to calculate the repayments in the event of a interest rate rise to ensure you are able to meet the repayments in a worst case scenario.
While we are not able to choose a home loan for you, we are able to provide you guidance as to what loan structure would be suitable for your needs.
REFINANCING PROPERTY IN NSW - WHAT YOU NEED TO KNOW
As mentioned in our transferring property page. A bank will hold the Certificate of Title over the property until the mortgage is repaid or they consent to a title transfer.
Refinancing will require the existing mortgage to be discharged, enabling the Certificate of Title to be transferred to a new owner or bank. The process is completed with the NSW Land Registry Services and usually takes two weeks to complete.
If you are refinancing a property in NSW that is owner occupied, for example, additional funds to perform renovations, you will not be charged stamp duty. If the property is not owner occupied, then it is likely you will pay stamp duty fees.
HOW WE CAN HELP
- Providing preliminary advice to align the refinance to align with your long term goals
- Collaborating with banks to ensure all the mortgage documentation is correctly prepared and submitted
- Advising on loan structure
- Working with your financial planner if required
- Liaising with your banks to assure settlement on the proposed date
- Submitting all necessary documents to the NSW Land Registry Services and paying all transfer costs on your behalf
- At the end of the refinance process, we’ll compile all the relevant documentation for you
Is there a limit to how many times I can refinance a property?
In terms of changing the Certificate of Title with NSW LRS there are no limits to how many times this can occur, you would simply pay the registration fee multiple times.
The limitation, would lie within the individual banks policies and procedures on their home loan product. Discuss this with your bank.
How much notice do banks need to provide me in regards to interest rate changes?
Usually you will be provided same day notice.
The majority of banks in Australia are part of the Australian Banking Association, who maintain a code of practice that members abide by. To ensure your bank is part of the Australian Banking Association, you can see if they are listed as a member here.
According to the code (Chapter 38, Part 153) - “If we change an interest rate, we will tell you no later than the date of the change”.
To be as observant as possible towards interests rates, follow the Reserve Bank of Australia and contact your bank when necessary.
Australian Banking Association
Fees 2018/19 - NSW LRS
Reserve Bank of Australia