Hassle-free ways to refinance
In most cases, there’s a trigger and it usually revolves around finding a better deal.
“When a customer comes into a bank with the view to refinance, the first thing the banker will want to know is what has motivated them to change,” says HSBC Australia head of mortgages Alice Del Vecchio.
“It might come down to simply they want a better interest rate, they feel they are paying too much in fees, or they’ve had a bad experience”.
“Most people who come from another bank are really testing the water to see if they can get a better rate or develop a broader relationship with their bank. People don’t want to be treated as a number. If they feel they are not known to their bank, they’ll start looking for a relationship with a bank that recognizes them, particularly if they want to borrow more, or borrow again,” says Del Vecchio.
Get your ducks in a row
Refinancing is surprisingly painless. It’s a far cry from the days of running around locating and compiling reams of paperwork. However, it’s wise to get your affairs in order before you visit a bank. This way you’ll save a lot of time.
Del Vecchio says refinancing is straightforward. “If you decide you prefer one of our home loan products and give us the all-clear to take it over, we will pay out your existing loan and instruct the other bank to release the security and title to us. We do it all for you. We deal directly with your outgoing bank, so you never have to engage with them.”
Del Vecchio advises people to first reflect on their current loan. “What do you love about the bank you are currently with, and what do you love about your existing product?
“What is it that’s making you consider looking at an alternative or seeking something better? Typically, when you have this conversation with a new bank they’ll want to know what it is that has motivated you to change. Once the banker – at HSBC that person is called a relationship manager – understands what you are looking for, they can help you. No-one wants to start the journey only to find out the new bank can’t meet their needs.
“A good relationship manager will be able to tell you pretty quickly if they can help you, so be prepared to be honest about what you’re not happy with.”
Del Vecchio says its helpful to tell your banker how you use your accounts so they can provide options that will be more useful to you.
Before you approach a new bank, you can save time by having 100 points of identification with you, such as an Australian passport and driver’s licence. You will also need evidence of where you live, such as a council rates bill. To ascertain how much you can borrow, you will need to show pay slips from the past two months and six months’ worth of bank statements.
If you are self-employed, you will need to provide two years of profit and loss statements and personal income tax returns.
This article was originally published on Domain