ing 4.45% loan

[grossreal]

hi all
any one know about a 4.45% ing loan
from my understanding its a 4.45% fixed for 5 years and the difference to the 7.2% rate 2.75% is capitalised and paid back at the end of the 5 year period.
just trying to get my head around it at this stage but maybe some one here is using this product
low doc 80%lvr product
I have a person that is going thru with one and woundering until I see the mortgage docs what it is.

 

[wanelad]

These loans apparently are causing a lot of heart ache is USA according to posts in another forum. If property value does not increase and at the end of the 5 years you have been capitalising the interest and paying interest on the interest then your loan could exceed the property value.

Therefore if need to sell you may not even break even but owe the outstanding interest that has not been paid. I am not sure that ING are offering this loan.

 

[Rolf Latham]

Hiya Gross

I think its the HBOS "capitalising" mortgage, Comes with many differeent badges, initially heavily promoted by Investors Direct, but now available through many mortgage managers

ta
rolf

 

[alexlee]

The problem, as usual, is with the people who use them. A conservative buyer would use the extra 2.5% or whatever that is capitalised into the loan to build a rainy day fund, invest in other assets, or put it into an offset account. Problems occur when the market is flat and the borrowers just used the lower interest rate to buy more house than they can realistically afford once the interest rate snaps back to normal. Many never budgeted for the higher rate because they assumed prices would rise and they would refinance back to a normal 30 year fixed mortgage. Or they were 'flippers' who never expected to hold the property for that long.

Reading the US media, there are stories of people whose interest rates rise 3% (say from 4 to 7%) when the low interest period ends.
Alex

 

[Glebe]

Sounds like a good product, that extra cash in hand would be really, err, handy.

 

[Tim]

Grossreal,

I phoned the 1800 number for ING and they didn't know anything about it - got put through to a loans specialist.

I am interested in following this up - any chance of finding out what the product is called or who in ING can be contacted about it?

Thanks very much,

Tim Lane

 

[wanelad]

I do not think it is an ING product maybe some wires crossed there I reckon

 

[tonyc00]

Hi

There is a similar product (as mentioned by a previous postee) which is marketed by Bill Zheng at Investors Direct.

Further details can be found via the website: investorsdirect.com.au.

I would do a search on this forum for further details because I know the product has been critiqued by some knowledgable forumites.

Regards

Tony

 

[Tim]

OK Thanks All,

the best service I have found so far is one put forward by Rolf and it is Better Mortage Management bmm.com.au

Tim

 

[grossreal]

hi all
not sure at this stage what it is thats why I asked here I have been told its an ing loan but that maybe wrong and that it is a 80% no doc loan also.
I have not done alot of research on it at this stage I know of the investdirect stuff but this sounded very different.
I just wanted to know if anyone has taken the loan and what the requirements for it were.
thanks all

 

[Tim]

I am in the process of putting a loan through BMM so will let you know...
Tim

 

[grossreal]

thanks tim
post here and email it to me how you go and what the terms and conditions are and how easy it was.
I am looking at a couple of loans, all at these types of loans at the moment.
so thanks for the info

 

[bubbleroo]

Hi Tim,

please confirm BMM website, because i've looked & contact the sydney phone no. on the site & the lady said finance is not their field of business....