Are you selling your property or refinancing your home loan ?
You will need to notify your current lender that the mortgage they hold is going to be discharged and that your loan will be repaid.
Is your new mortgage the best deal available?
Are you sure that the loan you are refinancing to is the best one for your situation?
As a specialist mortgage broking company we have access to some refinancing options that are very competitive and that are not available through a number of other mortgage brokers.
- Negotiated Interest Rates: If you’re seeking a large home loan then we can negotiate a special interest rate discount for you.
- Low Valuation: We can order free valuations with several lenders before submitting a loan application and then pick the lender that comes back with the highest valuation.
- Lenders Mortgage Insurance: Not every lender charges the same premiums for LMI. Use our LMI calculator to check if your LMI premium is competitive and read about the lenders on our panel that can waive your LMI entirely!
- Refinance Rebates: Did you know that some lenders will pay you to refinance? Check out our current refinance rebates .
We would love to give you a second opinion. Please call us on 1300 889 743 or fill in our free assessment form and one of our specialist mortgage brokers will get back to you with several competitive options.
How to request a discharge
If you are selling your property then please sign your lender’s discharge form and give it to your conveyancer or solicitor approximately four weeks before settlement and they will handle it all for you.
If you’re refinancing your mortgage then please sign your lender’s discharge form and give it to your mortgage broker and they will handle it all for you.
If you’re refinancing your mortgage but you’re not using a mortgage broker then please follow the below instructions:
- Commence the discharge at the same time that you apply for your new mortgage. This will avoid delays with settlement on your home loan.
- Print out, complete and sign your lenders discharge form.
- Call your lender and confirm the fax number and mailing address for their discharge department.
- Fax the form to their discharge department. Write the time and date that your fax was sent on the top of the form and also the number that it was faxed to.
- Mail a copy of the form (not the original) to the lender’s discharge department.
- Set a reminder to call the lender in 48 hrs and confirm that they have received your request. Ask them if they require any additional information.
- If they can’t find your form, ask them for the correct fax number, re-fax it to them and then set another reminder to call them in 48 hrs and confirm that they have received your request.
- When you sign the loan offer with your new lender, you should include the original discharge form along with a note
letting them know that you have already requested the discharge. Keep a copy of the form for yourself.
- Your new lender will now call your current lender and arrange settlement.
How long does a discharge take?
When you are leaving a lender, they have very little incentive to process your discharge request quickly. In fact, the longer the discharge takes the more money they charge in interest! Some lenders take four weeks to process a discharge but, luckily, most will take two weeks.
You should put in your discharge request at the same time as you put in the application for your new home loan. Only do this if you’re confident that you’ll get approved for the new home loan .
That way your settlement will not be delayed. A good conveyancer (if you’re selling) or mortgage broker (if you’re refinancing) will take care of this for you early in the process.
A partial discharge is where you have more than one property secured by a home loan and you inform the bank that you would like to release one of those properties as security. The most common reason to do this is when you have sold one of your properties.
These are quite complex loans so we recommend that you talk to your lender to confirm their process and guidelines and allow up to six weeks for the discharge to go through.
As a general rule the lender will ask you to maintain the LVR that you had on your loan at the time it was approved.
So, for example, if you have two houses worth $500,000 each and you have a mortgage for $800,000 secured by those houses, then you have an 80% Loan to Value Ratio (LVR ) or 80% of the purchase price.
If you sell one of those houses then the lender will ask you to reduce the loan so that it remains at 80% LVR. So at settlement the lender will require $400,000 from the sales proceeds so that the remaining loan is $400,000 which is at 80% LVR.
However, if it’s been a while since you purchased the houses then maybe they have gone up in value. Let’s say you originally borrowed $800,000 on two houses that were worth $500,000 each.
Since you purchased them they have risen in value to $600,000 each. When you sell one house, the bank may revalue the remaining property and ask you to reduce the loan to $480,000 to keep the loan at 80% LVR which is the same as it was when your loan was approved.
Your conveyancer can assist you with a partial discharge.
Please make sure that your conveyancer liaises with the mortgage broker that originally setup the loan to ensure there are no unforeseen complications.
Your conveyancer will need to give your bank clear instructions as to what you are doing and how the loan will be restructured. You can view our example notes for a lender to assist them to complete a partial discharge request.