New Loan Drawn by NAB to change the Interest rate from Varaible to Fixed

[sam.baba]

Hi Guys,

I need a bit of advice on signing some documentation sent by NAB to change a 6.77%Variable Interest Rate home loan to a 6.24% Fixed Interest rate Interest only in arrears home loan.

I am so confused about the whole process of NAB creating a brand new loan account, when I asked them about it they advised that is the normal process; I believe that this process would have definitely had a credit check process in it as well.

In the loan document sent today by them they have indicated that the Home Loan is for $326,932 and the total repayments are going to be for 29 years starting from 25th of November 2011.

However currently in my Home Loan account the balance sitting is $325,733, does it mean that I can withdraw the difference between $326,932 and $325,733, which is around $1200?

Also I initially started my Home Loan with NAB on 31/03/2010, which amounts to almost 1 year and 9 months, therefore by starting on a 29 year loan am I going to pay additional Interest for 9 months?

Any suggestions would be very much appreciated.

 

[Peter_Tersteeg]

You'll be paying interest over the remaining 29 years of the new loan term. They've essentially extended the total term by 9 months.

I've got no idea why they've increased the loan or if that money is accessable. You should talk to the person who set this up for you for detailed explainations.

 

[sam.baba]

Thank you

Hi PT_Bear,


Thank you for your responses, just one quick question though, if the bank has extended it by 9 months, does it mean I am going to pay more interest?

Thank you.

 

[Aaron_C]

Yes you will pay more interest over the life of the loan. But then again, it is unlikely you will take 30 years to pay off the loan.

 

[jroth]

If you're paying Principal and Interest it means your repayments are something like $2034.74/month for 29 years, compared to $2047.48/month for 28 years 3 months.

So if you kept the loan for the full 29 years you'd pay something like $14k more, but chances are you sell/refinance before that term is up anyway.

 

[Rolf Latham]

Hi Guys,

I need a bit of advice on signing some documentation sent by NAB to change a 6.77%Variable Interest Rate home loan to a 6.24% Fixed Interest rate Interest only in arrears home loan. .

if the loan is IO, then usually the total loan term is irrelevant.......

ta
rolf

 

[sam.baba]

Thank you all

Hi all,

Thanks for your advise.

In regards to the excess amount that I will have in my new home loan account, when I spoke to a CSR from the home loan area at NAB, she was unwilling to give a definite assurance about whether I could transfer the excess amount into my transaction amount, and she advised that she will get the person who originally processed the loan to call me!!

Why are these people like this?

 

[Mick C]

Maybe the CSR really didn't know the answer.

I rather them get back to me..rather then give me a BS answer.

Regards
Michael

 

[Bigtone]

Hi all,

Thanks for your advise.

In regards to the excess amount that I will have in my new home loan account, when I spoke to a CSR from the home loan area at NAB, she was unwilling to give a definite assurance about whether I could transfer the excess amount into my transaction amount, and she advised that she will get the person who originally processed the loan to call me!!

Why are these people like this?

I would say the difference is capatilised interest up to the day the docs were printed, whether u can access the spare cash will depend on when the next repsyment is made, they may not even take it and when new loan kicks in the first repayment will be one month from that date so in effect you get to keep the money either way. It is actually illegal to do it they way because they have increased loan amount without doing assessment of financial situation but most banks do it that way because their systems are so useless.

 

[Rolf Latham]

Hi all,

Thanks for your advise.

In regards to the excess amount that I will have in my new home loan account, when I spoke to a CSR from the home loan area at NAB, she was unwilling to give a definite assurance about whether I could transfer the excess amount into my transaction amount, and she advised that she will get the person who originally processed the loan to call me!!

Why are these people like this?

Hi Sam

the CSR doesnt know and thus has done the right thing.

to provide an assurance in something you know little about would be misleading............I understand its inconvenient.

Ta

rolf

 

[INVSTOR]

Hi all,

Thanks for your advise.

In regards to the excess amount that I will have in my new home loan account, when I spoke to a CSR from the home loan area at NAB, she was unwilling to give a definite assurance about whether I could transfer the excess amount into my transaction amount, and she advised that she will get the person who originally processed the loan to call me!!

Why are these people like this?

I have the same problems of understanding my statements so I took it to my accountant who said he also couldn't understand it or his business statements and he had lots of problems also so changed banks. If I remember right, after hours of reconcilliations and conversation with 3 or 4 employees I found out what my discrepencies were. Part of it or all was for extra interest as it took them about 8 days after due date to draw up loan so the extra interest was added to loan. Maybe check if that has happened. I could be remembering wrong as it was about 2 years ago, and there may have been some valuation fees or something in there too. I found there would be no correspondence to explain what costs they have taken out of bank account or added onto loan.

 

[exsyd]

Just to say I had the opposite experience - I also fixed one loan with NAB recently, thought they would treat as a 'new' loan, but they just basically changed it for me and just sent me a letter advising they had done so. But I had a low LVR (<50%), not sure if that makes a difference. They did do a reval which I had to approve, but that's it.

Yes, you'd be paying more interest, but if you just keep up the payments you were making before, it shouldn't make a difference (need to check the terms of your contract of course, there's usually a max principal repayment limit, but you probably wouldn't be near it).

 

[Bradsdad]

Hi all,

Thanks for your advise.

In regards to the excess amount that I will have in my new home loan account, when I spoke to a CSR from the home loan area at NAB, she was unwilling to give a definite assurance about whether I could transfer the excess amount into my transaction amount, and she advised that she will get the person who originally processed the loan to call me!!

Why are these people like this?

I would suggest that the excess funds are part of interest accrued up until the date they have recorded for the loan settling.


Regards
Steve