We are looking at changing banks as our current interest rate is just too high. My question is, we have just sold a property which settles on the 22nd of next month. Our current bank holds the tittles to this property. Is it just going to be too messy if we change banks whilst settlement is happening, should we just hold off untill after settlement has happened? There will be about a 1.3% differance in interest rate.
I assume you have approached your present bank for a better deal ?????
link below for your reference ………..
Hi Bayer
No not messy at all although if the existing lender settles you might be up for some costs or exit fees etc.
Ideally want to get the new lender on board asap so that things are happening quickly.I have a deal in at the moment where Settlement is on the 14th Nov and i am very confident we can make that date so 22nd shouldnt be a problem.
All depends on the balance of information.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks guys,
Yeah we have spoken to our bank and they are prepared to come from 7.8% down to 6.7% but won't set us up an offset account. Our exit fees are $500. Another bank I know is offering 6.2% or 6.4% (can't remember which) with free redraw and an offset account.Thanks Qlds007, I will speak to a couple of banks today and see exactly what it will cost and how smooth the transition will be.
If all the security is cross collateralised i.e. all properties secure all loans, I would suggest that you hold of as although the refinance settlement may take place prior to the 22nd when the sale is due it may not leave enough time for the new mortgage to be registered (this is depended on the Land Titles Office in the state that the security is in).
Note that some lenders can take up to 20 working days to process a refinance settlementThis delay may cause an issue for the purchases lender as some do not like settling a property with unregistered dealings ie your new lenders mortgage on the property.
However if your lending has 'stand alone' security just refinance the loan/property that you are retaining
Hi MarJac,
The security is cross collateralised. Two blocks of land with no loans are security for PPOR mortage in WA. I was just thinking that before one of those blocks were sold we may look more attractive to the banks to give us a better deal…but then again if we wait till after the 22nd the mortage we will be refinancing will be $180k less so I guess it doesn't really matter? Perhaps it's best to wait to avoid any delays. I will go into the banks today and tomorrow and see what each are prepared to offer and if it's going to be too messy then I will make the change after the 22ndIf you take a copy of the contract of sale, hopefully unconditional, for the block that your selling to the new lender(s) the worst is that the new lender may give you an approval 'subject to settlement of xx block' and/or funds from settlement (or a certain amout) to be applied in reduction of debt etc
I've seen plenty of settlements delayed/postponed due to a number of 'transactions' happening at once
Bayer
Hate to say at 6.2% it will not be a true offset account but more like a redraw offset account within the loan.
Such structure can be a total mess if the loans were for investment.
Personally i would have them all separate and standalone and certainly not have your PPOR acting as security.
Clients seem to think interest rate is the most important factor however this is not the case for successful investment.
Sounds like you need some impartial advice as clearly your Bank is not giving you that if they are suggesting you use your PPOR as security. Might protect them but wont do anything for you.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I have made a few phone calls today. The best offer we received from another bank was 6.5% with unlimted redraw and an offset account (but maybe that was a redraw offset, I didn't ask as I hadn't read this then). We rang our bank back and asked what they can offer us. They have said 6.6%, same account as we have now with free redraw and they will set us up a separate 100% offset account. I told them if they can match the 6.5 we will stay. He's getting back to us.
Qlds007 the blocks of land which we brought 5 plus years ago and paid off before buying the PPOR. So the land is security for the PPOR not the other way around?
Knowing a bit more now (but still have soooo much to learn) our next investment we will set up completely separate. My new accountant has advised us ways to consider doing this
If Im not making sense it's because I still have so much to learn but please make comments because I'm so open to learning I'm like a sponge.
Bayer who is the lender ?
Sorry but is doesnt sound right. The interest is non deductible being on your PPOR so guess that doesnt matter.
Redraw and offset are a mile apart.
Lenders will tell you they are the same thing but they are not.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I didn't know if I was allowed to say on the forum. It's bankwest
Nothing wrong with Bankwest and Yes no problems in saying it on the forum.
Typical Bank though they want a bit of everything when it comes to security and wouldnt now how to structure a loan to suit a customer.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
We have been happy with them and if they want to come to the party which they seem keen to do then we would rather stay , saves any mucking around. Thanks for your comments. The more I talk about the more I learn
You can actually change bank anytime you want..
It would not be messy..
I've also have tried it and all goes well.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
