We are a transitional lender, meaning we encourage our customers to move to another lender when you are ready to do so. There is a process for moving your loan, we refer to this process as discharging your loan.
Keystart is a transitional lender. This means that we help you get started on your home ownership journey with our low upfront costs, that is a low deposit and no lender's mortgage insurance. Then once you are ready and have some equity in your home, unlike other lenders, we encourage you to refinance to another lender. Sounds strange we know!
When you start to look at refinancing, the first thing you will realise is how many different home loan products are available. Not all loans are created equal and each will have its benefits. We have prepared some resources to get you start to compare what is out there.
There are a few important things to consider when refinancing, including the equity you have in your home and a careful look at the perks and costs of other lenders.
You may find it useful to read:
We can't provide you with financial advice, but we do recommend that you seek your own independent financial advice prior to making any decisions about your financial needs.
When you have built up enough equity in your home, either because you have paid off some of the loan or your home has increased in value, you may meet the criteria of other lenders and at this point we encourage you to refinance your loan.
Building equity can take many years so you may need a long term plan for refinancing your loan. Your equity increases in two ways.
No, you don't have to. You can stay with us as long as you like! However, once you have built your equity you may be able to get a better deal with a new lender.
The real question on everyone's lips is how much will I save. Like every aspect of the home loan experience, this answer will fluctuate between each person and situation.
Interest rates are often the key deciding factor for most people when comparing lenders for home loans. When comparing interest rates you may see an advertised rate below what you are paying with Keystart, but it is important you include all the costs associated with setting up a new loan with another lender, including things like lender's mortgage insurance (LMI), fees and charges and the amount of the deposit required.
You can read more about how to compare interest rates and the true costs of home loans here.
Before you jump into refinancing, get everything on your side of the fence sorted.
Get your paperwork together and understand exactly where you're sitting, what you want to achieve from the process and how far you're willing to go. Information is power, so simply understanding what cards you have in your hand can make all the difference. Contact us early in the process so you can be fully aware of what is required.
Then contact the lender you have picked. A lot of people prefer to head into a brick and mortar branch, but most lenders will have an online enquiry form. Be prepared, there is a good chance you are going to need to spend some time going through documentation with a new lender.
You will usually need to have enough equity in your home to meet the requirements of banks and other mainstream lenders. In order to calculate your equity, your new lender will do their own valuation on your home. Your lender's calculation of the equity of your home may differ from your valuation.
Remember, this is your money and your home. If you don't like where the switching process is going, don't throw yourself into a situation you'll struggle to get out of. So, shop around, ask the big (and the little) questions.
If you are a shared ownership customer and your loan is able to be refinanced (not all are), remember you'll need to refinance the whole loan amount, including the share that the Housing Authority have in your home. Read more in our guide All about shared ownership.
If you are thinking about transitioning to another lender, contact us to find out more about Keystart's discharge process. The process of moving to another lender, or refinancing, will vary depending on your own financial situation.
We’ll help you through the refinancing process to make it as smooth as possible.
The process for discharging your loan if you are selling your home differs based on your home loan type. Just get in touch and we can advise you of the next steps.
If you have a shared ownership home loan, you can read about the process for selling your home in the All about shared ownership guide.
Keystart recommend you seek your own independent financial advice prior to making any decisions about your financial needs.