Check the cost of abandoning a refinance before signing its documents

A proposed refinance can cost money before funding

The current lender will not extend the loan, so you approach a replacement financier. Before paying fees or accepting documents, ask which costs are payable even if the new loan does not proceed. Obtain independent advice on the actual terms. An application that fails can still consume cash the business needed for its other obligations.

Separate the stages of the proposal

Imagine a borrower paying for a valuation, legal review and a funding commitment while another lender is also considering an application. List the stages reached with each financier and the documents accepted. Distinguish indicative terms, paid third-party work and any binding commitment. Do not assume that all costs depend on the loan eventually being drawn.

Read the fee conditions carefully

business.gov.au recommends understanding a contract before signing and seeking advice where necessary. Apply that approach to application fees, valuation costs, legal expenses and any cancellation terms. Ask who can authorise additional work and whether an estimate can change. A verbal assurance that the process is low cost should be checked against the proposed written obligations.

Source: business.gov.au: Prepare a contract

Compare options without hiding duplicated spending

If two financiers require separate valuations, show both potential expenses rather than counting only the successful lender's cost. Ask whether existing information can be used, without assuming acceptance. Keep each payment's purpose and refund conditions visible. In the borrower's example, a cheaper interest rate may still involve material upfront spending across the applications being pursued.

Set a decision point for further expenditure

Before another paid stage begins, review the conditions still outstanding and the likelihood of funding in time. Ask advisers which actions preserve a realistic alternative and which merely add cost. Do not continue commissioning work because earlier fees have already been paid. Equally, do not cancel an application without understanding the consequences of doing so.

Keep the existing maturity obligation visible

Track the original lender's requirements while replacement finance is assessed. Show confirmed fees as cash outflows and proposed loan proceeds according to their actual status. If funding remains uncertain, obtain advice about the available alternatives promptly. A disciplined application budget helps prevent the search for an exit from creating a further cash shortage before the old loan is due.