Getting Ready to Sell or Refinance Home Loans
If you’re selling your property, your lender needs to know. The same applies when you’re refinancing your home loan. To do this, you’ll need a mortgage discharge form.
Many lenders have their own discharge forms. If yours doesn’t, you need to fill out a generic one. This document informs the lender about the discharge and the repayment.
When opting for a new loan, talk to an expert. This will ensure the new loan is a better option than the one you have now. The lender will look at all the variables and help you make the decision.
How Do I Request a Discharge?
To request a discharge, you should fill out the form and give it to your mortgage broker. The process is the same whether you’re selling a property or refinancing a loan. You need to do this at least four weeks before the settlement to ensure it’s processed on time.
If you don’t have a broker, you’ll have to do this on your own. Here is how to get a discharge from your current lender when refinancing a mortgage.
• Print the discharge form and fill it out.
• Make two copies of the form. Fax one copy to the lender’s office. On the other copy, write the number you sent it to and the time and date of the fax. Send the other copy to the lender by mail.
• Call the lender’s office within two business days and ask them if they’ve received your form. If they haven’t, you’ll have to resend it. Make sure you have the right number written down.
• Keep one copy of the discharge form for yourself, as you may need it later.
When you sign a deal with your new lender, you’ll have to supply the original discharge form. Let them know that you have requested a discharge and it will be completed soon.
As soon as you’re finished with the documents, your new lender will contact your former lender. They’ll discuss the payment and arrange settlement.
How Long Will I Wait?
In most cases it takes between two and four weeks for the discharge to be completed. That’s why it’s recommended to send the form at the same time you apply for a new loan.
Sometimes the wait will be longer. In reality, when you’re leaving a lender, they’re not in a rush to process your request. The more time they spend processing your discharge, the more they can charge in interest.
If the wait becomes too long, it may delay the scheduled settlement. To avoid this, talk to an expert and ask them what you can do to speed up the process.
What If I Want a Partial Discharge?
If you have more than one mortgage with a lender and you’re only selling one, you’ll need a partial discharge. These types of loans are more complicated than those that secure only one property.
Your lender will want you to maintain the loan to value ratio. The amount you’ll have to repay will depend on the current value of the property. Many properties increase in value over time, so you may end up paying more than your original loan was.
In cases as complicated as this one, it’s best to talk to an expert. With their help, you’ll find out more about how to ask for a partial discharge. They’ll also be able to calculate how much the repayment is going to cost you.