Mortgage Refinancing Process & Procedures – Application to Settlement
Step 1: Mortgage Refinancing Credit Application
Following a phone or face-to-face interview with your Mortgage Refinancing Group Australia Refinance Mortgage Broker / Mortgage Planner, you have decided to apply for a particular homeloan for the purposes of refinancing a mortgage. You will now be required, with the assistance of your Mortgage Refinancing Group Representative to complete a credit application form relevant to the home loan lender or mortgage manager that supports the particular homeloan you have selected. Along with your credit application you must supply documents that support your Identification, Loan Purpose, Credit History and Financial Data.
On receipt of the above your Mortgage Refinancing Group Representative will prepare your personal client file along with your credit application pertinent to the selected lender’s requirements and then lodge your application with that lender.
You will receive notification from us that your credit application has been lodged when we receive from the lender confirmation of receipt of your application.
Step 2: Conditional Approval
On receipt of your mortgage refinancing application the lender will apply their normal credit application processes involving acquiring a credit report, checking credit history, confirming employment & residence status, assessment of income, assets & liabilities. Provided your application satisfies their credit criteria, they will issue a Conditional Credit Approval. There are usually one or more conditions outlined within the approval, the most common being subject to satisfactory valuation of the security property.
Most lenders have a 3 day turnaround for issue of a conditional approval however this can extend out to 5 – 7 days in peak periods. We will notify you of the granting of Conditional Approval along with the conditions noted within. Some input maybe required from you to satisfy some of the approval conditions, therefore your assistance at this point is vital to ensure the fluent processing of your mortgage refinancing application.
Step 3: Valuation Ordered
At the time of conditional approval, the lender will order a valuation assessment of the security property to establish a value of 90 day saleability and ensure that it also meets with their lending criteria. Lenders will instruct their panel valuer to carry out either a book valuation, drive-by valuation or walk through valuation depending on the specifics of your application.
Depending on the type of valuation assessment ordered, it will take between 1 – 3 working days for the completed valuation to be returned to the lender. In the case of a walk through valuation, delays can occur due to difficulty of gaining access to the security property caused by real estate agents, property managing agents or tenants. Your assistance in preparing your agent and/or tenant for the valuer’s visit is vital in ensuring the continued fluency of your application.
Some lenders may choose to order the valuation assessment before conditional approval to enhance the speed of application processing. Because the valuation assessment is such a critical step in the application process, Mortgage Refinancing Group adheres to a practice of ordering the valuation assessment up front prior to your mortgage refinancing application being lodged with the lender.
We will notify you when the valuation assessment has been ordered.
Step 4: Valuation Returned
When the valuation report is returned to the lender, if the assessed value is greater than or as expected, then the details of the security property will be checked for compliance with government authorities and credit criteria. If compliance is met your application will be recommended for Unconditional Approval provided all prior loan conditions have been met.
If the valuation is lower than expected but still within acceptable limits, the lender will request us to consult with you and confirm if any adjustment of the loan amount is required and/or you have agreed to any extra costs that may be resultant from the lower valuation. In the case of a higher valuation amount you may request a higher loan amount, and if so, serviceability may need to be re-assessed to ensure that you can still service the higher debt.
Step 5: Unconditional Approval
Provided that all loan conditions have been met and credit criteria satisfied, the lender is in a position to issue an Unconditional Approval for your Mortgage Refinancing Application. If there are no outstanding conditions, Unconditional Approval is usually granted within 48 hrs from receipt of the valuation assessment.
Mortgage Refinancing Group will notify you of Conditional Approval the same day it is granted and also check with you that there are no last minute alterations required to your loan approval, loan features and/or loan set up.
At this point some lenders will issue a Letter of Offer which they require the borrowers to accept by signing and returning a copy of the offer within 7 days.
Step 6: Homeloan & Mortgage Documentation Issued
As soon as your application is unconditionally approved (and a signed copy of the Letter of Offer has been returned), the lender will issue instructions to their appointed Settlement Agent to prepare your Homeloan and Mortgage Documentation Kit which will include the following documents:
- Loan Contract
- Mortgage Document
- Memorandum of Acceptance
- Terms & Conditions
- Disbursement Authority
- Plus other Ancillary Documents
Mortgage Refinancing Group will notify you that the Homeloan & Mortgage Documentation has been issued. If you don’t receive the documentation within 48 hrs after notification, it is important that you inform us so that we can follow it up.
Before issuing the documentation kit the appointed Settlement Agents will carry out a title search of the security property for confirmation that the title holders and borrowers are the same or in sync.
At this point Mortgage Refinancing Group will lodge your Discharge Authority with your existing lender, as they may require up to 10 working days to retrieve your Security Packet which contains your Certificate of Title as well as prepare themselves or their agents for the discharge of their mortgage.
Step 7: Documentation Signed & Returned
Each borrower will be issued with a copy of the Homeloan & Mortgage Documentation for their immediate reference and to be retained for their own purposes. The original copy for signing will be issued to the nominated borrower or nominated borrower’s legal representative/conveyancer.
Each borrower is usually given the option of signing the documentation with or without legal advice. At times a lender may insist on the borrower/s obtaining some form of advice before signing the documentation. A Mortgage Refinancing Group Representative will be available to go over the documentation with you and recommends that you avail yourself of this service whether you are seeking legal advice or not.
When and only when you are happy with the explanation of the documentation and its contents, sign the documents where indicated and return them directly to the lender’s settlement agent with any other requested documentation. Alternatively you may return the signed documentation to us so that we may check it for correctness before returning same.
On receipt of the signed documentation, the lender’s settlement agent will contact your current lender/mortgagee to obtain a payout figure and provided the payout figure is within the limits of available funds will proceed to book a suitable settlement date. Please note that any errors with the payout figure will delay the settlement.
Step 8: Settlement Booked
The lender will book a time to settle the mortgage refinancing transaction in conjunction with your solicitor or conveyancer (if you have one acting on your behalf) and/or with your existing lender’s discharge department. We will inform you of the settlement date.
You may be asked to supply additional monies in the form of a bank cheque for settlement proceeds if additional cash is required to complete the mortgage refinancing transaction. We will be advised of this by the settlement agent or lender and will contact you if so.
Step 9: Settlement
Provided that there are no unforeseen delays, settlement will take place on the arranged day. We will inform you when settlement has taken place.
Step 10: Post-Settlement
Your Mortgage Refinancing Group Representative will contact or meet with you to ensure that all accounts have been set up correctly and that you are aware of your first repayment date. Most lenders will supply you with a customer service or homeloan service contact number for post settlement assistance.
I hope you found this article to be of value. If you have any queries in regards to the information contained within, please contact our Finance Centre and speak with one of our knowledgeable and friendly consultants. Phone 1300 448 911.
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Mortgage Refinancing Group Australia – Mortgage Refinancing Specialists