Including the agency fee into the loan or pay separately ?

Discussion in 'Property Finance' started by JohnHenry, 12th Aug, 2011.

  1. JohnHenry

    JohnHenry Mister

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    Hi People,

    When I sign up with one of the wealth building agency (JDL Strategies) in getting the Interest Only 95% loan with Bankwest, they put the $8500 fee into the loan so in total I can get $608.500 in total estimate.

    This IO account has the offset facility to let me re-draw and repaid as often as possible.

    shall I exclude this agency fee out from my Interest Only account or pay cash straight away ?
     
  2. Bradsdad

    Bradsdad Mortgage Broker

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    What is the valuation and what does the fee relate to?
     
  3. JohnHenry

    JohnHenry Mister

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    The fee was the commission for finding and preparing the wealth strategy as they said.
     
  4. Bradsdad

    Bradsdad Mortgage Broker

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    Not sure if you can claim the fee but best check with your accountant.

    I'm hoping the Bankwest offer is decent and they are just being lazy. I know a couple down this way that have their favorites just because they are easier for them to deal with rather than what's best in the clients interest.
     
  5. NBS

    NBS Member

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    Sorry not answering your question, I thought with Bankwest to have thier offset account linked up was $15.00 per mth in fees. This seemed over the top really.

    Brian
     
  6. BuildingBlocks

    BuildingBlocks Internet Warrior

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    Mine is, effectively you need around $3000 in there at all times to cancel out the $15 month.
     
  7. JohnHenry

    JohnHenry Mister

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    Yes I am paying $15 for my home loan account offset fee.
     
  8. JohnHenry

    JohnHenry Mister

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    which account is this ?
    my account got over 70k in there an I deposit my salary into that account monthly over $4k so I guess this is different product.
     
  9. Kristine..

    Kristine.. Broker and Raconteur

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    Hello JohnHenry

    I am a little concerned that you are paying a consultant $8,500 and yet they are not explaining anything to you

    So what are you paying them for? They should be making sure that you understand exactly what is happening

    OK:

    For starters, no one can ‘add in’ a fee to the mortgage loan.

    What they can do, is to ask you to sign a Disbursement Authority so that at settlement, your Solicitor will request a cheque be made payable to them for the amount you have agreed to pay them.

    Mortgage loans are calculated in two ways:

    Can you afford it? The lender applies servicing calculations which include your ordinary income, rent or other investment income, benchmark expenses, and the sensitised payment of the loan ie payment of the loan with an artificially high interest rate to ensure that if rates rise, you would still be operating within servicing parameters

    Secondly, lenders lend to a Loan to Value Ratio. BankWest will lend to 95%LVR and allow capitalisation of the Mortgage Insurance to the loan. So you may end up with eg 97.23%LVR or some other slightly irregular amount.

    This is capitalisation of the mortgage insurance premium, not capitalisation of your consultant’s fees. However, if you provide a Disbursement Authority to them, so that at settlement of the property when cheques are beig prepared, that there is a cheque prepared for your Solicitor, payment of rates etc and also payment of the consultant’s fees. Yes, I have mentioned this twice so that you read it at least once.

    BankWest has an extensive range of products. Ten minutes checking out the BankWest website will show you what they offer. If you have applied for the Mortgage Shredder Home Loan, then the Mortgage Shredder Offset Account will cost you $15 per month.

    However, as you have no doubt been told by your Broker, this particular product has a roll over provision and that there are other products on offer at the moment which will do what the Mortgage Shredder does but which are eligible for the Lite Offset Account, which costs $3.99 per month.

    It seems to me that you are not asking for assistance from the people you are paying for assistance.

    Alternatively, call BankWest direct and ask someone there to explain all the various features and benefits to you.

    All this information is readily available online and through the lender's enquiry phone lines, but if you are paying for consulants then they should be making sure that you understand every step of the way, including product selection and why these particular products may be appropriate for you.

    Hope this helps
    Kristine
     
  10. Propertunity

    Propertunity Real Estate Buyers Agent

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    We are all concerned about that Kristine. But you can read the OPs previous posts where we've tried to talk him out of it, but it would seem, to no avail.