Mortgage broker error, mine or both?

Hi there all,
This is my first post on what I can see is an amazingly informative website. I'm looking for some thoughts and suggestions please.
My wife and I have just bought our first IP out in Mount Druitt.
We used a mortgage broker (MB) to find us the best deal.
We met face to face with the broker and right from the beginning explained what product we were looking for; interest only loan for an investment property, variable with an option to fix part of it.
The MB came back with their credit proposal application form with the suggested lenders. It ticked all the boxes we were requiring. We agreed on the lender and when told the MB to go ahead with that product. When we were finally approved for the loan, we found a great deal and had to move fast on it. Contacted the MB and the contract was signed in a rush.
Now this is where our inexperience comes in.
We are now the proud owners of an IP but unfortunately also the owners of a mortgage we did not want. I noticed yesterday that despite requesting and then agreeing to an invest only mortgage, the MB allowed us to sign a contract for IO and principle.
I understand it is our responsibility to check contract before signing, but is there not a responsibility on the MB as well?
Can I have your thoughts and suggestions on the subject please.
Many thanks.
 
What bank is it with? Some banks allow you to swap more easily than others. May also depend on the specific product.

Also, do you have a copy of the stuff you signed? Or a copy of the formal approval letter from bank? This might tell you that perhaps it was bank error rather than you or mb.

As always, everyone should read what they sign!
 
As dt said, most lenders itstick and flick

Some its a new app.

In either case, should be able to be changed to an IO loan, its just the difficulty that varies.

ta
rolf
 
Hi hudbry,

First i'd have a talk with your mortgage broker re:io loan.

Sure it wasn't the banks fault not the MB?

Throw a bank into the equation and they sure as hell will stuff things up one way or another.

Cheers Spades.
 
Thanks you guys for the speedy responses. Much appreciated.
It's with Commonwealth Bank.
We have spoken to the MB and we have now signed and sent off a "switch loan" to them in the hope they will change both the fixed part and variable part of our loan to interest only.
The MB originally got a quote from the bank for an investors mortgage.
The problem happened when the MB went back to the bank changing it to an owner occupier one. The bank re-issued the new contract to be signed, but failed (we now find out of course) to include it as interest only.
On none of the pre-contract our contract documents does it clearly state it is interest only or principle. Instead or just has the repayment figures.
I'm hoping that because both my wife and I are already existing customers of Com Bank they will switch it with few hassles.
I understand, and of course take part responsibility for failing to check the figures but also am a little aggrieved at the fact that a MB has one job really: find the product we want and make it happen. Alas.......
 
I understand, and of course take part responsibility for failing to check the figures but also am a little aggrieved at the fact that a MB has one job really: find the product we want and make it happen. Alas.......

Things go wrong, it's a fact of life. I always judge the performance of those who I deal with on how well they fix stuffups.
The last loan that I arranged through my bank was a nightmare in stuffups. It took ages to sort out the problem but in the end I was recompensed for the inconvenience by my bank totally refunding every single one of their fees.
The loan officer went on stress leave part way through the process.
 
That is good. Thanks for the vote of confidence.
Just hoping they don't come back to us and ask for a hefty fee for the switch.
 
On none of the pre-contract our contract documents does it clearly state it is interest only or principle. Instead or just has the repayment figures.

That sounds strange. Interest only will state interest only repayments for x periods. Is it that a P&I loan doesn't specifically state that it's P&I, and you didn't know what to look for?
 
That sounds strange. Interest only will state interest only repayments for x periods. Is it that a P&I loan doesn't specifically state that it's P&I, and you didn't know what to look for?

Based on the post by hudbry it's probably fair to say that hudbry didn't know what to look for. There's a lot of information in loan offer documents and if you don't know what to look for it's very easy to miss this.

Based on the CBAs systems, it's almost certainly a data entry error on the brokers part. To be fair however, it's not difficult to make a typo or overlook a single field. Also the CBAs systems don't give very good feedback to let you know you've made this type of error.

Fortunately the fix is simple and quick to fix. From the description of the process it sounds like the broker has done 99% of the application quite well.

If you are charged a fee (unlikely), it would be reasonable to expect the broker to cover it.
 
Had a similar one the other day....submitted as IO on the pre approval and approved as such then property found and mad rush to get unconditional but mysteriously loan approved this time as P&I which I didn't pick up in the approval letter. Client noticed it in their loan offer. As a switch is simple with CBA we decided to leave as is rather than get re documented. All good will switch it day after settlement.
 
Again, thank you all for your advice. I certainly feel a lot better about the situation having advice from people with similar experience or who know the industry an awful lot better than myself.
Alex Lee: you are probably right in both respects; the PI did not specify it was PI, only the repayment figures, which stupidly I failed to triple check. At that stage I was looking to make sure we were getting the correct interest rate and signed away........
Not heard anything yet of course, it being Christmas time, but shall let you know what happens.
Many thanks and have a good holiday.
Regards.
 
Again, thank you all for your advice. I certainly feel a lot better about the situation having advice from people with similar experience or who know the industry an awful lot better than myself.
Alex Lee: you are probably right in both respects; the PI did not specify it was PI, only the repayment figures, which stupidly I failed to triple check. At that stage I was looking to make sure we were getting the correct interest rate and signed away........
Not heard anything yet of course, it being Christmas time, but shall let you know what happens.
Many thanks and have a good holiday.
Regards.

Go into a branch tomorrow and change it, should be a very simple process.

If you can't send me a PM and I can email you the required form and help.
 
As promised, here is an update.
Just heard from the broker and as most of you suggested, all is well.
CBA have come back and said that the switch has been approved and will be reflected in the next few days. No discussion of fees.
Many thanks again for your thoughts and experienced advice, it has been much appreciated.
Have a happy new year everyone.
Regards.
 
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