Low Doc Home Loan Remortgage
The COVID-19 pandemic has put many Australian homeowners into financial situations where they now have to refinance their houses. Refinancing or remortgaging your current home loan can be difficult, especially if the original loan is a low doc loan. It is possible to refinance a low doc loan, but it can be challenging. Are you eligible? Even though lending criteria are different with each lender, there are some standard guidelines. Typically, you are eligible to refinance your low doc loan if the following apply: You are borrowing less than 80% of your property’s value. You have a clear credit history and minimal debt. You have paid your monthly repayments on time and consistently over the last six months. If you want to release some of your home’s equity, you must provide a valid reason and proof of your loan’s purpose. To verify your income, you will need to provide a certified letter from your accountant or your business’s bank statements. What can I use the loan for? If you are approved for a low doc refinance, you can use the loans for the following: you can release equity to purchase a new home or investment property, or you can invest in shares of a business. A few lenders may allow you to consolidate your debts, but this needs to be discussed with your lender. Low doc remortgages are considered high-risk, and therefore, they have stricter guidelines for how you can use funds freed up. If you are thinking about refinancing your home, discussing your situation with a mortgage broker is essential. Mortgage House and our team of brokers can help determine if refinancing is right for you. If it is not, we have other financial options available. Contact us today.
Can I Refinance a House That has Been Paid Off?
The short answer is yes. If you have paid off the original mortgage on your home, then you own it outright. Taking out a new mortgage or refinancing the house can be beneficial, but there are also risks involved. Pros Remortgaging your house allows you to borrow from the equity you have in your property. You can then use this borrowed money to make home improvements, pay off credit card debt, buy a new car, etc. Refinancing your home can make sense financially, but there are some cons. Cons The biggest reason not to refinance your home is the risk that is involved. Not only does remortgaging your home tie you to a new long-term financial commitment, but you also run the risk of having the home you once owned outright repossessed if you cannot pay off the new loans. In addition, refinancing a home may result in a higher interest rate over a more extended loan period than a five-year personal loan would. The loan term is another con to consider. If you plan on selling your home within the next few years, a new long-term mortgage may not be the best option. Discussing the possibility of a home refinance loan with a mortgage broker can help you understand the pros and cons. How does the process work? If you already own the property, lenders will look at the new mortgage the same way they assessed the old one. Banks will consider the property’s value, your income, debts you may have, and the housing market in your area. Most lenders allow homeowners to borrow 80% of their own home’s value when they remortgage their house. Refinancing a home that you already own is possible. A broker can help you decide if remortgaging is the best option for you by considering your financial situation and the plans you have for the future. Mortgage House knows the financial ins and outs of homeownership. A non-bank home mortgage lender, we are committed to finding our clients the best loans and mortgages that fit their needs. Visit our website to learn about our refinancing options.