How soon can I refinance after purchase without incurring any side effects?

Discussion in 'Property Finance' started by property_geek, 14th Jan, 2019.

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  1. property_geek

    property_geek Well-Known Member

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    We just completed a purchase. We chose a particular lender because other lenders have constraints in terms of employment contract length. They were not giving full clarity on whether our loan would be approved or not prior to submitting application.

    Since the property was purchased in auction we had limited time to complete settlement. So we went ahead with a lender with maximum certainty of approval. Even though the interest we are paying with current lender is very high (4.8%).

    Now that we completed settlement, we have time to shop around and look for better interest rates.

    My question is: If we find a lender that is offering around 4% (2 years fixed), should we switch immediately? It would save us more than $1k per month on $1.8m loan.

    Would it affect our loan history in a negative way? For example future lenders( for future purchase or refinance) may think this guy is switching lender too frequently and may see my application less in their favour.
     
  2. Terry_w

    Terry_w Mortgage broker licenced 4 tax/legal advice Business Member

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    no need to wait at all.
     
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  3. Redom

    Redom Finance Strategist Business Plus Member

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    Not a big deal. If you got your initial loan through a broker, best to speak to them first too and ensure there’s no claw backs/let them do the refinance for you. Usually in these circumstances they may gameplan this move for you anyway.

    Also may want to check if your existing lender offers you the fixed option youre looking at.
     
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  4. Eric Wu

    Eric Wu Mortgage Broker Business Plus Member

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    Usually you can refinance straight away ( unless there are special conditions).

    Re credit hits, busy file is not a good thing.

    If a broker has helped you with the current loan, maybe a good idea to discuss with him/her re possible option (rather than you do the running around and misguided by branch staff).
     
  5. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Check that the lender you refinance too doesn't have a strict requirement when it comes to wanting to see 6 months worth of current home loan statements. It's silly I know! But some lenders have stringent rules that they don't like to bend.

    As Redom said above - if the loan was originated via a broker then consider providing them the opportunity to help. That's going to be a massive clawback for them to cop :-(

    Also consider whether fixing the entire loan is going to be beneficial to you. You generally can't link up an offset, make extra repayments, redraw ect from a fixed loan. Having said all that - I have no idea about your situation.

    Cheers

    Jamie
     
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Owner occ or IP?

    ta
    rolf