Why should you refinance a low doc loan?
There are several reasons for getting a refinance for you current loan. Among them are the following:
- You lost a job
- You are earning less than what you used to
- Major life changes occurred like the birth of a child
- You can’t meet monthly mortgage payments on time
- You have a lot of debts to repay
It can be any of these things. There could be a lot more. But it does not really matter that much. What you need to focus on is how you are going to get the refinance so you can better manage your payments and avoid getting neck-deep in debt.
There are many benefits to refinancing:
- You can consolidate debts into just one loan so you can better repay them
- You can change your mortgage type from variable to fixed rate
- You can take advantage of better interest rates, which means more savings
- You can free up some cash
- You can lower the amount you pay for your mortgage each month
Those who are thinking of refinancing low doc loans are typically going to switch lenders. It is best if you consult a mortgage broker before you do anything. That way, you’ll know if you are doing something wrong. A broker can help you get more info on refinance a low doc loan. He should also guide you in the process of loan application. When you have a professional working alongside you, the chances of encountering complications or getting declined are very slim.
Don’t worry if you think this is going to be a daunting process. As a matter of fact, the refinancing process is similar to the initial process you went through with your initial loan. Your mortgage broker should walk you through it. He will tell you what documents you need to present and the steps to take.
You fill out and submit an application, get a valuation, and wait while lenders review your qualifications and assess your eligibility. Once lenders approve your loan, they will ask you to sign some forms. Now, if you have switched lenders, you will need to arrange a meeting with your current lender and fix some things (removing their mortgage from the property).
Remember that refinance applications are considered higher risk by lenders. This is part of the reason you can only borrow up to 80% LVR. And since there is a higher risk involved, it is not surprising that lenders impose very strict guidelines and make it a little challenging to qualify.
But with the help of a good mortgage broker, you should be able to ace this process. You have to make sure that your broker is highly experienced and know a lot of lenders. The more lenders your broker knows, the more chances you have in getting approved for a refinance.
In addition, you can learn more about refinance a low doc loan through them. Their knowledge, experience, and skills are invaluable to you. By successfully refinancing a low doc loan, you should be able to better manage your monthly repayments.