I recently received the application form for an ANZ “Breakfree” package recommended by a personal banker at ANZ.
On reading the document I was sent, I noticed that it is not regulated by the Consumer Credit Code. Is this a bad thing?I also found that “ANZ can … vary any … term and condition of your loan” without my consent. Is this normally the case with e.g. home or property investment loans? I am feeling nervous about going ahead.Annie QHi annie Q – and welcome to the forum. it's funny that reading a contract like that is certainly enough to put anyone off that's for sure. Some contracts are worse than that – ie 'we can cancel it anytime we feel like' – and 'we reserve the right to review annually and cancel the facility ….' come to mind.
That said lets go one step at a time.
Firstly, if a loan product is considered an investment product (in other words, more than 50%of the funds are not for personal use) it is not covered under the UCCC. A line of credit, or an interest only loan is viewed by some lenders as being in the catagory regardless – however any loan to buy an investment property is not covered under the UCCC – so don't be too alarmed there.
As far as the contract goes, I remeber many years ago a bank manager telling me ' you shoudl get legal advice on this contract'. my reply…'so if I find somthing I don't like, I can change it then ?' His response. "you are more than wlecome to do what you want, but oif you don't like it or want to change it , essentailly it means we don't lend you the money.' Sad but true.That is not a bad package at all, (there are plenty worse!) so as long as you are getting a few different loans, and use it to the full, I'm sure you will find it works for keeping your investment borrowing costs down. All the best.
If you read any mortgage agreement in full you probably wouldn't want to sign it – but you have no choice really as they are all the same. You probably need the bank's permission to renovate the kitchen for example.
The UCCC covers the borrower in cases of hardship etc. so having it apply can help if you fall behind in repayments etc.
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
If a loan is for investment purposes it will not be covered under the UCCC regulation if it is for residential purposes it is covered.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
