Refinancing is the new normal
is a process that most homeowners in New Zealand go through. It’s when you replace your existing mortgage with a new one to take advantage of better interest rates that other lenders offer, use a consolidation exercise or find a solution that better suits your current financial circumstances. To make the most of your refinancing, it is important to understand how it works, what you need to do and why you might want to do it in the first place. Let Hayman Lawyers explain what is involved in the process and why it is becoming the new normal.
How to refinance your mortgage?
Deciding to refinance
your home doesn’t have to be challenging. You may only be restructuring your existing loan with your current lender to suit your financial situation better. You may have been promoted and have a higher income, and you would like to increase your payments. Or you could find yourself in financial difficulty and are looking to borrow more than you intended at the beginning. Whatever your situation, you are often able to discuss your needs with your lender without legal assistance.
However, you might have come across another bank that offers better interest rates, and you would like to take your mortgage to a new lender. You will need legal support in this situation, as your existing mortgage documents will need to be replaced with an updated version. Once you have agreed on the new terms of your mortgage, a lawyer will need to prepare loan and security documents before you can begin the refinancing process. A conveyancing lawyer can prepare all documentation for you and liaise with your current bank about a break fee.
A discharge fee is the amount you have to pay your current lender to break the contract. Before making a decision to refinance, you should always compare the discharge fee to the benefits of your new mortgage to determine whether it’s actually worth it. Your conveyancing lawyer will then obtain a repayment statement from your old lender and register the discharge of your mortgage and your new mortgage.
How to decide who to refinance with?
If you have seen a better interest rate advertised elsewhere than what you are currently on, you might be inclined to look at other mortgage options on the market. You are able to explore repayment terms and interest rates on the internet through bank’s websites and even obtain a refinancing proposal from a lending institution relatively easily. Interest-rate calculators help you make decisions and steer you in your desired direction. You might, however, engage the services of a mortgage broker. These individuals have access to a wide range of lenders and have great relationships with lenders. They are often able to negotiate terms and conditions to fit your needs.
Refinancing your loan with Hayman Lawyers’ help
The market for providing loans is getting increasingly competitive, and with the financial situations of people constantly changing, more and more individuals are looking for better interest rates and refinancing. The Hayman Lawyers team can offer legal assistance for your refinancing across New Zealand to help you secure a loan solution that works for your needs. Contact us today
to discuss how we can support you during the refinancing process, and we will be happy to answer any questions!