Have I just been shafted a little bit?

[Gargamel]

Had a meeting with my lender today about accessing a offset facility with my existing home loan. After satisfying the loan officer as to why I needed to access such a facility, I was told that I would need to switch loan products away from my uber cheap no frills variable loan to the standard variable loan package to set up an offset account. This would cost $300 an incur a slight interest rate bump.

No problem, says I. I asked about retaining access to the $$$ currently sitting available for redraw. I was told to transfer the cash to the account I wanted to make the offset account and then email the loan officer to process the switch. This would ensure I didn't lose access to these funds. So I went ahead and transferred the $$ out when I got back to the office.

I called the loan officer to ask her to process the paperwork. She then informed me that the whole process would take at least 2-3 days and that I would have to fill out additional paperwork (this is after asking at the meeting if there was any other paperwork to be done - I just filled out an application for an offset account).

So I guess this means I will be slugged with a chunk of extra interest while this is being processed. Was I naive to think this would be a quick and painless changeover? I did think it was a bit suspect when the loan officer suggested I wait a few days after transferring the $$$ out of the redraw before contacting her ("to make sure the transfer is OK..."). Yeach, so you can charge me some extra interest, I thought!

Comments please!

 

[josko]

Hi there,

The problem is you are asking for a completely different product than the one you are on. No-Frills accounts with nice low interest rates are just that...No Frills products.

When you throw an Offset account into the mix...it is a different type of Loan Product and unfortunately new paperwork is needed. The problem with Loans Officers and Account Managers is that they know some things about "some things" and not enough about everything!

Are you really worried about a few days interest? I can't image it would be that much unless you are holding out on us and have billions sitting in that Offset Account?

You could always ask for it to be reimbursed due to the fact that your LO neglected to inform you it would take 3 days? Anything is worth a try.

Regards JO

 

[Gargamel]

Yeah, I guess it's not that big a deal. So long as I don't lose access to my buffer cash!

 

[vincenzo]

It's hard to walk in a bank, or even call them without getting shafted even a little bit.
The worst i've seen is a clause which goes something like:

"At any time, and at our discretion, we can change any of the terms, fees, and charges as we please, because we worship satan."

Or something like that, i forget the exact wording.

 

[Qinau]

I suspect this is the CBA, sounds familiar as I did this not so long ago myself and found the same thing.

My redraw funds stayed the same and just became redraw for the new loan, actually I don't even think the account number changed to be honest. The only differences were the $300 fee and a higher interest rate I have both redraw and the MISA account in play, any extra now goes to the latter.

Cheers

 

[tobe]

The LO did the right thing, I have heard of people losing their extra repayments when the switch goes through, and that would be worse than paying some extra interest. By all means try for a refund of the lost home loan interest, only after the new loan is set up and working. I wouldn't get on the wrong side of the LO until then.