I rang my bank about their line of credit. the lady i spoke to said the line of credit is my Master credit card, which is part of my mortgage package. And my home loan has the redraw facility. I can redraw the extra repayments I have made at the one-off cost of 10 dolllars if doing it online/over the phone or 20 dollars at the branch.
Is this correct?I forgot to ask her what a "non transactional account" means, as my offset account of ST George's advantage is a non transactional account.
Anyone here can answer these questions? Thanks.
forgot to ask another one.
the lady at st george mentioned "capitalised". she said if the replayment is capitalised, then I can't redraw. what does this mean?if i'm going to make a one-off repayment, do I have to instruct them not to capitalise it if i want to redraw at a later date???
If the bank has this redraw facility at the low cost of 10-20 dollars, what's the point of keeping my savings in my offset account? (I keep my savings in the offset account for emercencies. )what's the difference between keeping the savings in the offset account and paying off to reduce the loan.sorry. to correct my question in the first post, my offset account is not a fully transactional account. not sure what types of transactions my offset account can't do..
very very confused…each question i have will create more and more questions for me…
Lucy,
The reason you are confused is that the person on the other end of the phone had ABSOLUTELY NO IDEA what they were talking about. All your questions are pretty standard, and you should call your bank back and ask to speak to someone that handles Mortgages on a regular basis, not just the first bank teller that is available.
I could spend thwe time to address all your questions (which I and most of the brokers on this forum are more than capable of doing) but that would negate the need for me to exist. If your bank is crap, and you can not get good service, you should use a broker to fill that gap.
Try calling the bank again and speaking to a more experienced Mortgage consultant.
Best of luck.
You should also be very careful in taking advice from a bank from a tax point of view. They will advise you that a 100% offset account is no better than a LOC when this is plainly not the case.
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
Thank you both. i've made an appointment with a broker at the bank. I'll see what she'll say. the person I spoke to on the phone was actually from the home loan department. I don't know why she said the line of credit was the credit card. I later found out on their website that they have another loan product that has LOC. but that product charges 0.1% more than my current loan.
Terryw wrote:You should also be very careful in taking advice from a bank from a tax point of view. They will advise you that a 100% offset account is no better than a LOC when this is plainly not the case.Hi Terry, can you pls explain more?
LJ, the money in an offset account is your money, it can be accessed at any time and is not regarded as redrawing funds or a new loan so you can use it any way that you like. A line of credit is essentially a new loan and you will need to watch what costs that you put on this account eg rates, land tax etc or new clothes, holidays etc – the latter are personal expenses and the interest is not deductible.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
