How long does it take to refinance a home loan? From start to finish, refinancing a home loan can take anywhere from a couple of days to a few months. In most cases, the process is completed within four to eight weeks. Read on to find out more.
As you’re no doubt aware, in May of this year, the Reserve Bank of Australia (RBA) increased the cash rate for the first time in over a decade. A second increase followed in June, and then a third in July. This has been the fastest and steepest cash rate rise since 1994.
Home loan lenders have largely followed suit and increased their variable home loan interest rates. This means that the refinancing market is very competitive, and it could be a good time for you to look at refinancing your home loan.
How long does it take to refinance a home loan?
From start to finish, refinancing a home loan can take anywhere from a couple of days to a few months. In most cases, the process is completed within four to eight weeks. The length of time can vary depending on the complexity of your home loan and your personal circumstances. A lot can also depend on how quickly you provide your chosen lending institution with all the documentation they require. It also depends on how quickly they can review your application and process the loan itself.
But what if time is of the essence and you need to get through the process quickly? Here are a few tips that may help move things along and see you refinancing more quickly.
Engage a Home Loan Specialist
If time is of the essence for you, it’s wise to engage a home loan specialist like our Lending Loop experts. Our team can help you to be refinancing ready and find the right lending options for your unique situation. They also know what the busy refinancing market is doing, what lenders are offering the most competitive deals and the ballpark loan processing times for each lending institution. All of these things are important when time is of the essence.
Do a home loan health check
Stay on the front foot with your home loan and do a home loan health check. This way you are well prepared with information about your current mortgage situation and what you might need or want in a new loan. This also puts you ahead of the game when contacting lending institutions so you’ll be better prepared to find a home loan more favourable to your circumstances. This could also help you to lock in a good fixed rate deal before the RBA increases the cash rate again.
Know your loan to value ratio
The home loan market is expected to balance during 2022. Your home may have benefited from the price growth across the past couple of years. If it has, your loan to value ratio (LVR) may have decreased, which could mean you are eligible for a better interest rate. Your LVR is the value of your home loan as a percentage of your home’s value. To work out your LVR, divide your outstanding loan amount by your home’s value.
Do your comparison homework
After your home loan health check, do your homework and know what rates different lending institutions are offering on the amount you owe. Then call your current lending institution to check your rate and ask if they can give you a more favourable deal.
Have your documentation ready
Just as when you took out a mortgage, you will need documentation ready for refinancing. Our refinancing checklist will help you gather all the information you will need. In short you will need documentation for your:
- Proof of income
- Current home loan statement
- Current living expenses
- Current debts and assets
Know your credit score
Having a good credit score can speed up the refinancing process. You may also be able to negotiate lower interest rates and better loan terms and conditions.
Once you know your favoured lending institution for refinancing, it can be an idea to seek loan pre-approval. This can be a good way of knowing the likelihood of being approved for refinancing with that institution, which can in turn speed up the refinancing process.
A competitive refinancing market means it’s a great time to refinance
The home loan refinancing rate is currently very high, and the mortgage market is competitive as a result. With the RBA’s recent moves on the cash rate, it’s looking likely that interest rates will continue to increase later this year. In addition to home owners’ usual reasons to refinance, this has made mortgage holders re-evaluate their home loans, and look to lock in fixed interest rates for the next one to five years.
Many lending institutions have competitive rates for those looking to refinance with equity in their homes. Several lending institutions have released new incentive offers, such as home loan cashbacks or more flexible loan terms and repayment options. At Lending Loop our experts can help you make the most out of the competitive refinancing market.
Talk to a Lending Loop refinancing expert
So, how long does it take to refinance a home loan? As you can see, the answer brings a few variables into play. We can help guide you through the refinancing process and find the best deal for your circumstances. We have over 40 of Australia’s biggest banks and specialist home loan lenders at our fingertips.