Hi all,
This evening my partner and I went into a local ANZ branch to get a pre-approval for our first home. Didn't know they do it on the spot.
We decided to get the Breakfree paakage an all with a standard variable home loan paying IO with an offset a/c. The terms on the IO loan is for a max 10years. I asked if that could be extend, the response was a hard firm NO, then she said it's a policy etc.
What are the chances of it being extended down the track, if we were to make our first home an investment property and purchase a new home?
I'm sure it's open to nego. as when I saw the mortgage lender computer the interest period she put in 10 years into the computer!
i guess i've 10yrs to think about it!
Work Ur Money
Hi work ur money
Don't lose too much sleep over that one. The ANZ are one of the only lenders that will do I/O for 10 years – most are 5. THe idea is that after that time you either stat paying down some principal, or re – negotiate (ie refinance) the loan into another I/O one – by which time of course you should have had a major boost of between 50-120% of your property value. All standard stuff, and bear in mind a lot of people woudl have paid off half their home loan in 10 years for a PPOR.
After the five year mark (or 10 in this case) a lot have either sold, re financed, or started to pay down their loan – so 10 years I/O is the best you will get – unless you use a line of credit facility – which is not suitable and costs heaps more interest in your scenario with your lender. GO for it – and all the best. )PS HAve you considered saving money and going for an I/O ANZ simplicity plus homeloan? Unless you plan on having a couple of ANZ credit cards and a couple of accounts as part of your package, it is cheaper.)All the best with the 1st home too!
Be careful with on the spot pre-approvals, in particular if you are borrowing over 80% of the property value. If the loan needs to go to their credit department for approval then they can (and very often do) disagree with the branch staff. Read through this forum and you'll see countless complaints from people who have been pre-approved, won an auction and then to find out that the bank doesn't want to do their loan.
In ten years you can extend the int only period with ANZ by internally refinancing the loan or by refinancing to another lender if ANZ refuses to do it. You could also consider a product switch to their line of credit product which I believe is evergreen (no set term).
Thanks for your responses V8ghia & Otto D
V8ghia – In the first place, we actually went through Aussie HomeLoan and we got a pre-approval for ANZ simplicity plus homeloan, but the ANZ one offset a/c can't be linked to it!
So hence we went to the ANZ branch ot look at the Breakfree package after doing a bit of reading on the net. As you have mentioned we will also apply for the CC and ANz One offset a/c.
Only disappoint for this package is that with the rewards program for the CC if i've a set of cards and my partner also has a set we have to pay two sets of reward free $110pa for the two ($55 each p.a)
Otto D – Yeah heard about cases when people obtain a place via an auction an find out later to be reject by the bank., I would be gutted! I don't think it's an on the spotapproval, but she gave us a letter to say we could borrow up to this much along with other details… i would assume all loans/pre-approvals would have to go to the credit department right!!!
I assume it should be ok in our case, because when we intiiatly went through Aussie, we applied for the same amount and it was approved within a week, I assume all our paper work had to be sent to ANZ from Aussie for review. But every case it different and it might get reject….. but it's good to know this could happen then rather not know!
If you have previously had a proper pre-approval via Aussie then it is likely that you will be ok. The "you can borrow this much" from a branch is meaningless, it is not a pre-approval and has not been to a credit department. It is dissapointing that the Aussie rep didn't investigate your needs properly to begin with and select the breakfree package for you from the beginning. If you were borrowing under $250k then the breakfree discount isn't competitive in which case Aussie's system would have likely have removed it from the results. If you are borrowing over $250k then the breakfree is relatively competitive.
Thanks once again Otto D.
I guess we learn soemthing everyday. When we first went into Aussie, the search they did came up with a whole bunch of products, as to why we didn't get the ANZ Breakfree package in the first place i'm not sure, but i first heard of it when i joined this forum!
Yeah i find the Breakfree package quiet competitive if we decide to link a few more loans to it down the track, and the annual fee of $375p.a. covers all the fee for every a/c but the CC rewards and the redrawal from an ATM from another finaical insit.
I agree with Otto D
Watch out for pre-approvals with escape clauses.
Can leave you high and dry without the funds to close.
The real danger is with auctions where you commit 10% and could lose some or all of it if can’t close.
I strongly recommend a non-auction transaction with a ‘subject to finance’ clause
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