What happens on settlement day
Settlement day is the day your new home loan is used to pay off your existing home loan. Typically, your new lender will do all the leg work for you. This includes:
- Liaising with your previous lender to pay out and discharge your previous home loan as well as registering a new mortgage for your property.
- Making sure your accounts are set up correctly and all funds go where they need to.
- Informing you of when your first loan repayment is due and what the repayment amount and frequency will be.
How do I prepare for settlement day
Before your new loan settles, your lender may ask that you provide a Discharge Authority Form to your previous lender. This form notifies them that the mortgage they hold is going to be discharged and that your loan is to be repaid and closed. Each lender has their own specific discharge process and your lending specialist will be able to guide you through what’s required.
They may also request that a Certificate of Currency be provided. This is a document issued by your insurance provider which confirms that your property is insured, and the policy is up to date.
What happens after settlement
If you choose NAB, after settlement, we’ll draw down on your loan. This means that we’ll debit the amount paid to your previous lender at settlement from your loan account, as well as any applicable fees. Any shortfall or surplus funds from settlement will also be paid, as per your instruction.
As there has been no exchange of property, there’s not a great deal for you to do other than enjoy the benefits of your new home loan and ensure you’re making your repayments.
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