Hi everybody! [grad]
With the recent talks of interest rate rises and so forth.. I thought I’d put forward this question that I’ve been pondering recently. If I was to get a loan approved today for another investment property @ x.x% and negotiated a settlement date for early next year sometime, would he bank provide me with the funds @ the current negotiated rate at the time of settlement or would it be adjusted to whatever the rate is at the time?
Thanks guys! [thumbsup2]
I’ll just add that I’m 95% sure that they’ll do the latter.. a little hopeful thinking doesn’t hurt! [blush2]
I also forgot to ask what the implications would be if I was planning to use a deposit bond for the deposit up until settlement? I’m assuming I’ll have to pay interest on the bond amount up until settlement.. what range would the interest rate be in?
Cheers
Loan approvals generally only last for 3 months, so you may have to apply again or supply updated payslips at least.
Fixed Rates are usually always the rate at settlement. These days a number of banks are allowing customers to ‘lock in’ their rate at application or soon after. But they are charging a fee of around 0.15% of the loan amount. These lock ins also only last for 3 months.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
The answer is that the variable rate of the day wil apply.
If you choose to fix your loan then you can lock the rate in by paying an extra fee. This will only generally be for the length of a average settlement.
Hope this answers your question.
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 9853 year fixed rate – 6.85%
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
For deposit bonds, you pay the fee up front, depending on the lenght of the bond and the amount etc.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thank you gentlemen! As usual, a great help[biggrin]
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