Hi (once again)
Recently did a ‘top up’ with the lender for one of my properties (who I wont name), however I think they offer a
Really
Average
Mortgage
ServiceAnyway, since I got the loan 18 months ago, they changed LMI companies. When they did my top up they took it to a new LMI Company, who gladly accepted my application. BUT I had to pay LMI on the WHOLE loan amount. (Over $7000 in LMI!!) I was told (numerous times) that I would only have to pay LMI on the INCREASED AMOUNT. (around $800)
As I had purchased another property, the short story is, I had to proceed. This mortgage company had taken 8.5 weeks (record time) to get me to this stage mind you. I treat my property investing as a business (as well as a hobby) and made a business decision to go ahead with the LMI so I didnt lose the deal I had committed to.
Just wondering if anyone has been stuck in this situation before and if there is any way you can get this looked at by a 3rd party to find out my rights and maybe claim back some of the $7k that I forked out.
Dev [kid]
The Banking Ombudsman is the third party you describe.
I would speak to their office and see what they suggest.
Cheers,
Simon Macks
Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Ti be honest I think the LMI should have been charged on the full loan amount and the problem reall lies with the moron you were dealing with at the bank.
As to what to do …..I’m not sure but I really don’t like your chances.
If the broker told you a specific amount for mortgage insurance and you relied on it and then were forced to pay more when you were committed, you should be able to recover. If it was a bank, see the bankingomudsman. If a broker, see the Credit Ombudsman Service Limited.
By the way, mortgage insurance will always apply to the total loan amount(s) on each individual property. LMI is a risk premium for the possibility of default. You may only be borrowing a small amount but the risk is still all money owing on that property so a premium is set on all debt.
TMA
http://www.email4money.info
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First Home Buyer WebsiteThanks for replies.
Have spoken to the banking ombudsman and they said I have every right to claim around $6500 back from these people. I dealt directly with the lender for the increase.
Will let u know how I go…
Thanks again
Dev [kid]
Just a note, the original loan was signed up in 2004 which I paid LMI on as it was an 85% lend. Before I did the increase they told me it was payable on the increase amount only, as I had already paid LMI originally. The problem was that they changed their LMI companies and typically, forgot this when doing the new application. It took long enough ANYWAY, and then they forgot that the loan had two properties and they had only done a valuation on one, so they had to ring another valuer and get him back to do the second one. When the break costs are realistic I will go to another lender – these guys are useless.
Dev [kid]
You should tell us the lender so we know to stay away.
You might have been charged LMI on all loans on both properties then. BankWest just tried to do it to one of my clients. I put a stop to that quick smart!!!
TMA
http://www.email4money.info
Essential Links
First Home Buyer WebsiteSorry TMA, I thought I explained enough about the lender in my first post? [grad] [kid][laugh2]Who else offers a Really Average Mortgage Service??
I just got a loan with Bankwest, I have loans with ANZ and RA*S too [tongue2] Bankwest have been the easiest and the best to deal with by far.
No doubt my mortgage broker agrees too it was a very easy process and have some good products right now. Might go back for another loan soon
Dev [kid]
Loved the description about your experience with the Really Average Mortgage Service.
I have learnt that although the banks are depicted as the big baddies, they in general have got to where they are by being pretty good and experienced at what they do.
I am now using HOME and have found their service extremely un-professional. At some points I have actually had to tell them how to do their job and my mortage broker is pissed because she recommended them and now regrets it.
To make it worse I took the word of my broker they were offering the best product for what I wanted to do but now realise that I should have stuck to doing the research myself as I have since found better products to use – but its not a big loss so I am not massively upset, just annoyed.
Last thing I wanted to say was that if you ever get to the point where they wont give you your money back then most lenders give you a refund on a large portion MLI if you discharge the loan within 2 years. So this may be a way to go to get to another lender and offset the discharge fees with a MLI refund.
<KS>
Is it about the money?
DAMN STRAIGHT IT IS!
Sorry, the RAMS thing went over my head!!!
TMA
http://www.email4money.info
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First Home Buyer WebsiteInteresting about the LMI refund KS, I will have to follow up, that would be quite interesting to be able to go back at them with…
The process is already underway to get it back anyways, so will see how we go. The banking ombudsman people think its pretty a pretty straight forward case so I will wait and see…
Dev * [kid]
LMI refunds are optional and up to the mortgage insurer. They usually only apply within one year and only if using the same mortgage insurer for the same property for the same loan amount.
TMA
http://www.email4money.info
Essential Links
First Home Buyer WebsiteSpoke to the RAMS representative today, and she advised that it all looks pretty straight forward and congratulated me for keeping everything so well documented hehe [gossip]
I think that may have something to do with her next question “how would you like the refund to be paid?” [grad]
I asked for a cheque. She said that she had to get it approved with the national business manager first but would have a definate answer in a few days…
Dev [kid]
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