NAB IO a PITA!

[Coconutwheels]

In fact NAB are a PITA to make any changes to your loan!

Got a letter in the mail from NAB saying my two year interest only period was up so I rang to continue the loan interest only.

Turns out I need to submit a full application and reassessment to extend IO with NAB. Same story last year when I was considering a split of fixed and var for this loan.

While this isn't, I guess too much of hassle now, what if I didn't meet their lending requirement anymore, or was changing jobs etc?

If everything is stable in your life probably not an issue. I'm now seriously thinking I should refinance out of NAB.

End of rant

 

[Terry_w]

A good reason to go IO as long as possible - you then have the option to pay PI if and when you choose.

 

[D.T.]

Was it homeside or nab itself?
Why did you only go 2yrs IO?

 

[perthguy]

If everything is stable in your life probably not an issue. I'm now seriously thinking I should refinance out of NAB.

Might be a good time to investigate if you can get a better deal if you refinance with another lender. Do you have a good mortgage broker?

 

[Peter_Tersteeg]

Was it homeside or nab itself?
Why did you only go 2yrs IO?

HomeSide only do 5 years I/O. No less.

This sort of thing occurs with quite a few lenders. ANZ are no better than NAB. CBA and Westpac are fairly good, but eventually they'd want to reassess as well.

 

[Coconutwheels]

Was it homeside or nab itself?
Why did you only go 2yrs IO?

NAB itself, for the life of me I can't remember/fathom why I would've done only 2yrs.

All my other loans are 5yrs IO, CBA ones I've done 3 times no questions asked.

I wonder What would happen if during their reassessment they determined you don't meet their servicing requirement anymore? Obviously you wouldn't submit the application if you knew there was an issue, but what if

 

[alexlee]

NAB itself, for the life of me I can't remember/fathom why I would've done only 2yrs.

The interest only period would have been clear on the loan document.

 

[Coconutwheels]

The interest only period would have been clear on the loan document.

Of course.

It's just interesting looking back trying to workout what let me to that decision at the time. Learning from it and now making a better one moving forward.

 

[Brady]

HomeSide only do 5 years I/O. No less.

This sort of thing occurs with quite a few lenders. ANZ are no better than NAB. CBA and Westpac are fairly good, but eventually they'd want to reassess as well.

Pete care to share an example of when CBA have asked to reassess when interest only period is up, excluding when the contracted period is up.

I haven't ever had a single issue, it's just a form.

 

[Peter_Tersteeg]

Agreed Brady, and they generally don't require it to renew after the first 5 years. After 15 years is likely to be another matter.

CBA are definitely one of the easier lenders to deal with on this, as you say, it's a single variation form.

 

[Mick C]

NAB itself, for the life of me I can't remember/fathom why I would've done only 2yrs.

All my other loans are 5yrs IO, CBA ones I've done 3 times no questions asked.

I wonder What would happen if during their reassessment they determined you don't meet their servicing requirement anymore? Obviously you wouldn't submit the application if you knew there was an issue, but what if

IT would be knocked back and nothings changes beside one unnecessary credit hit.

 

[D.T.]

IT would be knocked back and nothings changes beside one unnecessary credit hit.

So if you failed to service you could keep the loan? Do they val the property at that point as well?

 

[Marty McDonald]

You thinking that if you didn't service they would want to call it in? Well if anyone would they would. Nab is a business bank trying to get into retail, hence the attitudes to reviewing at every opportunity.

 

[Ausprop]

So if you failed to service you could keep the loan? Do they val the property at that point as well?

am curious about this as well - if LVR has blown out to 100 / 110% what do they do?

 

[Aaron_C]

am curious about this as well - if LVR has blown out to 100 / 110% what do they do?

Usually they just leave you alone and let the loan continue as per original schedule of P&I. It's not in their interest to call it in usually as a) there is no default and b) it may end up costing them money due to selling costs etc - although they reserve that right to do so.

For commercial loans - well that's a different story altogether.

 

[alexlee]

Usually they just leave you alone and let the loan continue as per original schedule of P&I. It's not in their interest to call it in usually as a) there is no default and b) it may end up costing them money due to selling costs etc - although they reserve that right to do so.

For commercial loans - well that's a different story altogether.

Resi loan contract covers the period after the IO period ends. i.e. after the IO period ends the loan document actually states it reverts back to P&I for 25 years.

On the other hand, don't commercial loans actually expire after 5 years?

 

[Aaron_C]

On the other hand, don't commercial loans actually expire after 5 years?

Depending on the loan provider. Most bigger commercial loans are on bank bills which are reviewed annually with perusal over the financial figures and a valuation every 2-3 years. So the annual review is where the commercial loan can be terminated unilaterally by the lender regardless of loan conduct.

 

[alexlee]

Point being, a failed application to extend the IO doesn't have any direct impact on the existing loan agreement, which covers the period after the IO period.

On the other hand, commercial loans really do have to be re-written because the loan term expires.

 

[MC1]

HomeSide only do 5 years I/O. No less.

This sort of thing occurs with quite a few lenders. ANZ are no better than NAB. CBA and Westpac are fairly good, but eventually they'd want to reassess as well.

You can tick and flick with ANZ

 

[Ausprop]

You can tick and flick with ANZ

can you please elaborate? my understanding is ANZ is a full loan reapplication