From: Les .
G'day all,
Recently sold one of my IP's - it had been untenanted for some weeks while on the market. Cashflow got a bit tight because of other costs around the same time, so I rang my lender to delay one payment of the mortgage (had an unconditional contract due to settle in a further 6 weeks).
Lender said "Yeah, sure - delay it one month, and catch it up next month" - no worries (pressure off, whew!!).
Settlement happened, and, lo and behold, my mortgage payments had been jacked (for that month) by 2% - you know, the usual penalty interest. Sounds reasonable? Well, not really - since I hadn't defaulted, but ARRANGED the late payment, I was surprised the 2% impost was invoked. Still - it's only 2% ......
WHOAAAAA!!! 2% of what? Oh, 2% of your WHOLE outstanding mortgage amount!!!
And since mortgage interest at that time was 5.95%, a 2% lift is a 33% lift isn't it?
Anyway, in a nutshell, settlement docs showed I paid 32% extra for that one late payment - late for just one month. What Interest Rate is that per annum? 380%
It would have cost me $5 to do a cash withdrawal from my credit card ($400 for one month at 15%) - instead I got stung for $120+
So, people, just be very sure to make those monthly payments - arranging to delay a payment might take the pressure off, but might also cost you 380%. Or, if things are really tight, try the credit card instead.
Wish me luck, people - I am contacting the lender (pointing out the true situation) to see about a more reasonable outcome. For me, as it turned out, even a "Payday Loan" might have been cheaper for me (now THAT is scarey!!!).
Regards,
Les
- "Eschew Obfuscation" - ;^)
G'day all,
Recently sold one of my IP's - it had been untenanted for some weeks while on the market. Cashflow got a bit tight because of other costs around the same time, so I rang my lender to delay one payment of the mortgage (had an unconditional contract due to settle in a further 6 weeks).
Lender said "Yeah, sure - delay it one month, and catch it up next month" - no worries (pressure off, whew!!).
Settlement happened, and, lo and behold, my mortgage payments had been jacked (for that month) by 2% - you know, the usual penalty interest. Sounds reasonable? Well, not really - since I hadn't defaulted, but ARRANGED the late payment, I was surprised the 2% impost was invoked. Still - it's only 2% ......
WHOAAAAA!!! 2% of what? Oh, 2% of your WHOLE outstanding mortgage amount!!!
And since mortgage interest at that time was 5.95%, a 2% lift is a 33% lift isn't it?
Anyway, in a nutshell, settlement docs showed I paid 32% extra for that one late payment - late for just one month. What Interest Rate is that per annum? 380%
It would have cost me $5 to do a cash withdrawal from my credit card ($400 for one month at 15%) - instead I got stung for $120+
So, people, just be very sure to make those monthly payments - arranging to delay a payment might take the pressure off, but might also cost you 380%. Or, if things are really tight, try the credit card instead.
Wish me luck, people - I am contacting the lender (pointing out the true situation) to see about a more reasonable outcome. For me, as it turned out, even a "Payday Loan" might have been cheaper for me (now THAT is scarey!!!).
Regards,
Les
- "Eschew Obfuscation" - ;^)
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