All Topics / Finance / Portable Loan – how does it work?

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  • Profile photo of AndersBAndersB
    Participant
    @andersb
    Join Date: 2007
    Post Count: 7
    September 11, 2007 - 8:53 am

    I have a $420,000 lo-doc home loan with a non-bank lender that gets it money from ANZ bank.

    My home just recently sold for $764,000 with settlement in a couple of weeks.

    I want to settle a property I am buying on the same day (was told both property transactions had to settle on the same day).  The property I am buying cost $610,000 so I have to pay some mortgage insurance.  The loan transfer is now unconditionally approved.

    Questions:
    1) Is it correct that the two settlements HAVE to take place the same day?  (this is a bit stressful)

    2) What are the fees I save? Is it only stamp duty for the mortgage? I live in Queensland.

    3) Is the deferred loan establishment fee period re-started when the loan is transferred?

    4) Any other general advice on how this works?

    Thanks in advance, you guys are a wealth of knowledge.
    Cheers,
    Anders

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    September 12, 2007 - 12:40 am

    Hi Anders

    Hard to give an answer without seeing the original letter of offer but in most circumstances.

    1) Yes both settlements need to be on the same day.
    2) Hard to comment could save an application fee as well.
        Most lenders will want a new valuation and have all the usual search costs etc.
    3) Depends on the letter of offer at the time.

    Both loan amounts will need to be the same and if you need any increase in loan amount then you will have to pay the additional stamp duty. 

    Richard Taylor | Australia's leading private lender

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    September 12, 2007 - 9:50 am

    I have recently made enquiries with ANZ for a client in a similar situation. Settlement need not occur on the same day. They can keep the loan open by depositing money into a term deposit – this will then act as security temporarily.
    Not sure if this would be available thru your lender.

    You may save a little in fees = application fees possibly, but these are often nil on the professional packs anyway. I think stamp duty on the mortgage may have be abolished in QLD too?

    Some lenders have a policy of waiving, or reimbursing a DEF if the client comes back for a new loan in the near future. ANZ do, from memory.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of AndersBAndersB
    Participant
    @andersb
    Join Date: 2007
    Post Count: 7
    September 13, 2007 - 4:08 am

    Thanks for the info  It seems there is not much benefit in portable loans, and it also seems like it is not very common for loans to be transferred.  The person looking after my application says it is the first time she has done a loan transfer.  My lender charges a fee for valuation, but does not charge any application fee.  So it seems my only saving is the home loan stamp duty.

    Cheers,
    AndersB

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