Hi everyone,
I joined the forum because I don't know where to go for advice. I'm hoping some of you money minded people can give me a starting off point? I'd be very grateful.
Almost three years ago, my partner and I were alerted to the fact that you could get no-deposit home loans, and decided that we should buy, rather than rent. We went with St. George, and fixed our rate at 8.44% (rates were on the rise and our broker advised us to lock...). We also had to pay 1% on top of this to make up for mortgage insurance. So our interest rate has been 9.44% for this time (great move, I know).
We purchased a property for $337,000.
I phoned St. George today to talk to them about what will happen in February when our fixed period expired. I told them that I wanted to stay with them, but move to a different loan product. Our payout figure as of today is $334,132 (including break costs for breaking fixed rate terms...without those figures it's $328,139).
They told me that switching products after the fixed period was impossible because there were two conditions that needed to be met before we could switch products:
a) That we have held the loan for three years (done).
b) That we have atleast 20% equity in the property.
Based on the fact that we have been paying our fixed payments and borrowed the full amount of the purchase price, it's basically impossible for us to have that much equity. This condition is not in any of the loan documentation I have (and I've been through it with a fine-toothed comb).
I think we probably have around 5% equity - if that. Meaning we're stuck with this high-interest loan product for goodness-knows how long.
St. George say the best they can do in February is 8.59%, and that it is completely impossible for them to switch our loan.
Other banks probably won't touch us either due to the lack of equity.
Should we just sell, cut our massive losses and start again in a couple of years, or slog on? I worked out that we will have paid $102,000 on the property over three years for nothing.
PLEASE don't tell me about what a bad decision we made three years ago, believe me, I know this.
I'm just looking for advice as to where I might be able to go from here?
Thank you so much in advance
Sarah.
I joined the forum because I don't know where to go for advice. I'm hoping some of you money minded people can give me a starting off point? I'd be very grateful.
Almost three years ago, my partner and I were alerted to the fact that you could get no-deposit home loans, and decided that we should buy, rather than rent. We went with St. George, and fixed our rate at 8.44% (rates were on the rise and our broker advised us to lock...). We also had to pay 1% on top of this to make up for mortgage insurance. So our interest rate has been 9.44% for this time (great move, I know).
We purchased a property for $337,000.
I phoned St. George today to talk to them about what will happen in February when our fixed period expired. I told them that I wanted to stay with them, but move to a different loan product. Our payout figure as of today is $334,132 (including break costs for breaking fixed rate terms...without those figures it's $328,139).
They told me that switching products after the fixed period was impossible because there were two conditions that needed to be met before we could switch products:
a) That we have held the loan for three years (done).
b) That we have atleast 20% equity in the property.
Based on the fact that we have been paying our fixed payments and borrowed the full amount of the purchase price, it's basically impossible for us to have that much equity. This condition is not in any of the loan documentation I have (and I've been through it with a fine-toothed comb).
I think we probably have around 5% equity - if that. Meaning we're stuck with this high-interest loan product for goodness-knows how long.
St. George say the best they can do in February is 8.59%, and that it is completely impossible for them to switch our loan.
Other banks probably won't touch us either due to the lack of equity.
Should we just sell, cut our massive losses and start again in a couple of years, or slog on? I worked out that we will have paid $102,000 on the property over three years for nothing.
PLEASE don't tell me about what a bad decision we made three years ago, believe me, I know this.
I'm just looking for advice as to where I might be able to go from here?
Thank you so much in advance
Sarah.
