FASTRefi or Rapid Refinance is a unique refinance process that uses title insurance underwritten by First Title to allow lenders to payout a borrower’s loan account within days, as opposed to the standard refinance process which takes weeks to complete. This process allows some solicitors such as MSA National and FMS (First Mortgage Services) to use the borrower’s current account balances and statements to calculate an estimated figure to payout the borrower’s existing loan.
With a fast refi, your new lender can certify your documents and electronically send the funds to your current bank, known as the Outgoing Financial Institution (OFI).
This means that your refinance will be quick, simple and managed by your new lending institution, minimising the stress and complication involved.
There are many benefits of a fast refinance:
- No fees: Most lenders do not charge a fee for their fast refinance process.
- Settle quickly: Once documents have been received and certified, you can have your fast refinance approved in as little as two days. This means your loan would take three weeks from the time you apply to when it is advanced.
- Save on interest: Refinancing to a new loan with lower interest rates will save you money.
- No complex paperwork: Your new bank will contact your current bank and organise your new loan, taking care of most of the work for you.
What is required to qualify for FASTRefi®?
Each lender will have additional requirements based on their agreement with First Title, however the below are the standard requirements. Please contact your mortgage broker to confirm ALL qualification criteria for the respective bank requirements:
- Disclosure of ALL linked debts – including credit cards and guarantees. Where a loan has linked business loans, it will not qualify for a FASTRefi®.
- Bank statements for all accounts – this is required to assist with the estimated calculated payout and up to 6 months of statements may be required
- Current balance for all accounts – this is required to assist with the estimated calculated payout.
- Outgoing lender must be on First Title’s approved lenders listing – It the incoming lender’s discretion as to which lenders from the approved list may be used.
- All borrowers and mortgagors on the new loan must be the same as the existing loan.
What does the borrower need to do during the FASTRefi® process?
- Continue paying the existing loan accounts and any linked accounts.
- Do not make any redraws or access the loan accounts or any linked accounts.
- Cancel any direct debits linked to the account to be paid.
- If a shortfall is expected, ensure the borrower deposits the extra funds in the loan accounts, at the time of signing loan documents.
What happens to surplus funds paid to the Outgoing Lender?
The outgoing lender will return the funds to the borrower, once the account is closed off.
What is a buffer?
The buffer is additional funds calculated and added to the estimated payout to allow for additional repayments which may be deducted at the time of settlement. The buffer also includes an additional fee charged by the outgoing lender to release the title deed/s.
The buffer is calculated using one month’s average loan repayment + accrued interest + $500 + the outgoing lender’s discharge fee (approx. $350.00).
The buffer ensures the existing loan account is paid out in full, and no further funds are required from the borrower.
What if a shortfall is advised following the payout of the loan?
If the outgoing lender requires additional funds, Incoming bank or their solicitor will contact the borrower or the borrower’s broker to organise the additional funds to be provided. This may be due, but not limited to the following reasons:
- The borrower redrew from the loan following the payout
- The borrower stopped making repayments
- The borrower did not provide the most up to date balance
- Additional accounts were not disclosed
Which Lenders Offer Fast Refinance?
Not all lenders have a fast refinance product. This is why it is important to speak to a mortgage broker who knows where you can apply for this loan type and get approval within just three weeks.
The following lenders offer a fast refinance loan (as at Jan 2023):
|Max Loan Size
|Bank of Melbourne
|Less than $1 million (No more than $100k cashout)
FEEL FREE TO CONTACT US FOR AN OBLIGATION FREE DISCUSSION.
Finance Circle Group
The information on this website is general information only and is not intended to be a recommendation. We strongly recommend you seek advice from your financial adviser as to whether this information is appropriate to your needs, financial situation and investment objectives.