Opening account before loan approval?
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Hey mins
AMP do this because they can!
No, really, it seems to be triggered by the on line data entry program which is outsourced to the brokers
Most lenders won't set up accounts until they are preparing loan documents, but with AMP it all happens much earlier in the process
An account is a banking product and obviously the offset can't be activated until it has a loan to be linked to
Just ignore it. If you need it, it's there and if the loan isn't approved then you can always call them and ask for the account to be cancelled
cheers
Kristine
AMP do this because they can!
No, really, it seems to be triggered by the on line data entry program which is outsourced to the brokers
Most lenders won't set up accounts until they are preparing loan documents, but with AMP it all happens much earlier in the process
An account is a banking product and obviously the offset can't be activated until it has a loan to be linked to
Just ignore it. If you need it, it's there and if the loan isn't approved then you can always call them and ask for the account to be cancelled
cheers
Kristine
Im not sure "why" they do it...but if i put my business hat on -im guessing they do it so they can keep you as a potential customer EVEN if you choose no to take the home loans with them because the valuation fell short or building inspections failed or what ever reason...
Some reason why some banks will give you a credit card before your loan is approved - hoping you would use the card
Regards
Michael
Some reason why some banks will give you a credit card before your loan is approved - hoping you would use the card
Regards
Michael
something they are fast at
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It's just an automatic process. The file may not have reached an assessor yet - they can be quite slow.
Cheers
Jamie
That would be a ripper of a product though if you could use it prior to loan creation for PPOR's at any rate.
Enabling potential first home buyers to pool money into an offset account which just capitalised interest and grew but did not attract tax on interest because it would ultimately be used to offset interest charges on a mortgage. Actually rethinking that rather than capitalising interest it would have to pay interest credits or some other means of recording but not paying interest where it incurs tax.
If you had to withdraw interest rather than setting up a mortgage it would then get taxed I guess.
Enabling potential first home buyers to pool money into an offset account which just capitalised interest and grew but did not attract tax on interest because it would ultimately be used to offset interest charges on a mortgage. Actually rethinking that rather than capitalising interest it would have to pay interest credits or some other means of recording but not paying interest where it incurs tax.
If you had to withdraw interest rather than setting up a mortgage it would then get taxed I guess.
and a great way for the bank to have a 100% committed future borrower.
I reckon it would still be a win / win if a big bank offered it that being locked in would not be such an issue as long as it was a big bank with the published variable rates which don't differ that much across the big 4 anyway and you applied for your discount right at the start. You would not want surprises like: "oh you guys with that product are the only ones in Australia who actually pay the standard variable rate..."
Could be a few thousand a year saved over a handfull of years. It is not insignificant when you are scraping together for your first home.
Also gives the bank a good place to look at genuine savings. One would assume if you had savings this would be the best place for them being both tax free and in essence attracting the mortgage rate rather than deposit rate.
Unfortunately AMP offset accounts do not earn interest when the balance of the loan is in credit.
Small issue though. There's no loan to offset against. Have to wait until settlement before it actually works.
Cheers
Jamie
Most don't...
