non-bank home loan hassle

[htopg]

Hi

I used SCMC (a non-bank lender) to get an equity loan from my PPOR.
Nice feature and good rate!
My IP is going to settle at 2:30pm this Friday.
SCMC cannot provide bank cheques for IP settlement.

I had 2 options
1.
a. Redraw by 2:30pm today (which already passed)
b. The fund will be in my nominated CBA account 24-48 hours
c. Get CBA bank cheque

OR

2.
a. Redraw by 2:30pm tomorrow
b. Pay a same-day redraw fee of $12
c. The fund will be in my nominated CBA account by tomorrow afternoon and I can be sure that I can get CBA bank cheque on Friday morning
d. Get CBA bank cheque

With option 1, I am so afraid that the fund arrives in my CBA account on Friday but in the afternoon and I will miss the settlement and probably face hefty penalty??

So I went for option 2.

Now I can see 2 advantages of being with a bank lender.
1. no need to arrange redraw to write bank cheque
2. the fund leaves your account when cheque is drawn by other party, saving you some days of interests

 

[nhg]

Get your solicitor to delay a day. Or write in clause for delay settlment costs 8% interest P.A. which will be like $1 for a day delay. It isn't really that big an issue in my experience.

Mortgage brokers. Love em.

 

[Terry_w]

What are the tax implications of all this???

 

[htopg]

What are the tax implications of all this???

I will redraw fund to my CBA account and get bank cheque to settle on the same day to show that the nexus has not broken.
Or has it?
I can clearly show that the redrawn amount is for investment property, not for personal leisure.

 

[Terry_w]

I will redraw fund to my CBA account and get bank cheque to settle on the same day to show that the nexus has not broken.
Or has it?
I can clearly show that the redrawn amount is for investment property, not for personal leisure.

Get some advice quickly!

I would say that it is potentially dangerous. To strengthen your position, at the very least, make sure there are no other funds in that CBA account. Otherwise the money will be mixed. Time is not so relevant either.

Imagine you are mixing orange juice and milk in a bottle for 5 seconds. When you take the milk out, can you say it is still milk?

 

[Mick C]

err just delay settlement for 1-2 days....it will cost you %+ legal fee

 

[htopg]

Get some advice quickly!

It is 6:41pm now.
No one can give me advice at the moment

I would say that it is potentially dangerous. To strengthen your position, at the very least, make sure there are no other funds in that CBA account. Otherwise the money will be mixed. Time is not so relevant either.

I rang up CBA and requested open a brand new account.
They did it under 3 minutes and I got the BSB and account number.
I will redraw to that account.

Imagine you are mixing orange juice and milk in a bottle for 5 seconds. When you take the milk out, can you say it is still milk?

No, I am not going to drink that milk...

Thanks Terry, you saved me

 

[Rolf Latham]

err just delay settlement for 1-2 days....it will cost you %+ legal fee

in QLD with time is of the essence contract you can be toast....... deposit gone and more

ta
rolf

 

[Rolf Latham]

Hi

I used SCMC (a non-bank lender) to get an equity loan from my PPOR.
Nice feature and good rate!
My IP is going to settle at 2:30pm this Friday.
SCMC cannot provide bank cheques for IP settlement.

well, they aint a bank, and just like you cant get a KFC bucket at McDonalds, some non banks do have relationships with ADIs for this sort of stuff.

ta
rolf

 

[pinkboy]

well, they aint a bank, and just like you cant get a KFC bucket at McDonalds, some non banks do have relationships with ADIs for this sort of stuff.

ta
rolf

You said KFC and McDonalds in the same post!

Ohhhhhhhhh!

pinkboy

 

[Scott No Mates]

It wouldn't be the first time that a NBL has settled a property. It just means that they will need to arrange the bank cheques through their banker (I recall that credit unions aren't banks either, they have arrangements to have bank cheques drawn).

If you fail to settle on the prescribed day, the vendor has to serve notice to complete (and this must be done after 14 days of you not having completed, at least in NSW).