I've just got my offer accepted on my first IP and am trying to arrange finance.
At this stage I'm looking at using St George both for my new loan, and refinancing of my existing loan, because there are considerable cost savings compared with my existing loan.
I've been through my existing homeloan contract for my PPOR and asked the bank for a payout figure.
Now this is where the problem occurs. In my contract there is a clause in the special conditions that states:
"If you repay 75 to 100% of your loan within 3 years from the date the loan is first drawn, you will have to pay the Bank a deferred establishment fee of $ "
The bank says that for this loan the fee is normally $1000, and they say that I will have to pay it regardless of what the contract actually states.
When I explain to them that there is no fee stated in the contract I get variously put onto someone else, or told that they can vary the fees at will if they want to and that I'd have to pay $1000 anyway.
The last statement isn't quite correct. According to the contract they must give me at least 30 days written notice of any new fees or changes not in my favour.
The people I talk to at the bank ask me "Do you agree that there is a fee payable for early termination", to which I respond. I agree that the statement above appears in the contract and that I want to know what my payout figure will be in consideration of this clause.
They won't give me an answer.
I can see this potentially holding up getting finance with the new lender, or presenting problems in discharging the current mortgage (because the bank will say that I still owe them money).
I see my options as:
1) Pay the $1000
2) Delay settlement until after the 3 years is up (which is about a 2 week delay)
3) See if the new lender will delay the transfer of this property by the 2 weeks and stay with the settlement date on the IP. This could be problematic because PPOR is being used as security on the IP.
4) Hire a lawyer to negotiate with the bank (which may end up costing more than the $1000)
The other issue is that stamp duty increases as of the end of the financial year, so delaying could impose a greater cost.
If I need to pay the $1000 it will probably push me over the 80% LVR meaning that I will also need to spend extra on mortgage insurance, which I'd like to avoid if possible.
Any suggestions?
Thanks in Advance
At this stage I'm looking at using St George both for my new loan, and refinancing of my existing loan, because there are considerable cost savings compared with my existing loan.
I've been through my existing homeloan contract for my PPOR and asked the bank for a payout figure.
Now this is where the problem occurs. In my contract there is a clause in the special conditions that states:
"If you repay 75 to 100% of your loan within 3 years from the date the loan is first drawn, you will have to pay the Bank a deferred establishment fee of $ "
The bank says that for this loan the fee is normally $1000, and they say that I will have to pay it regardless of what the contract actually states.
When I explain to them that there is no fee stated in the contract I get variously put onto someone else, or told that they can vary the fees at will if they want to and that I'd have to pay $1000 anyway.
The last statement isn't quite correct. According to the contract they must give me at least 30 days written notice of any new fees or changes not in my favour.
The people I talk to at the bank ask me "Do you agree that there is a fee payable for early termination", to which I respond. I agree that the statement above appears in the contract and that I want to know what my payout figure will be in consideration of this clause.
They won't give me an answer.
I can see this potentially holding up getting finance with the new lender, or presenting problems in discharging the current mortgage (because the bank will say that I still owe them money).
I see my options as:
1) Pay the $1000
2) Delay settlement until after the 3 years is up (which is about a 2 week delay)
3) See if the new lender will delay the transfer of this property by the 2 weeks and stay with the settlement date on the IP. This could be problematic because PPOR is being used as security on the IP.
4) Hire a lawyer to negotiate with the bank (which may end up costing more than the $1000)
The other issue is that stamp duty increases as of the end of the financial year, so delaying could impose a greater cost.
If I need to pay the $1000 it will probably push me over the 80% LVR meaning that I will also need to spend extra on mortgage insurance, which I'd like to avoid if possible.
Any suggestions?
Thanks in Advance
