I just paid out one of my loans for an IP that had 2-odd years left to run on a fixed rate. First off I got charged a $900 early exit fee on the fixed rate component; I also got charged an early exit fee of $360 for the closure of the mortgage account, as I paid out the whole loan.
On top of that I got charged $6,900 economic cost, and on top of that the cheeky buggers applied the full years’ account keeping fees of $395 the day before the loan was paid out. This is on top of a $150 preparation of discharge fee, plus another $200 for settlement fee!
I argued that I was getting gouged and it seemed over the top to charge me an early exit fee on top of an early exit fee, so they reversed the $360 charge. I also pointed out I got charged an annual account keeping of $395 for a single day, which was reversed.
I’m now arguing that they have overcharged me on the economic cost, as they did not take into account the $20k you can pay off without penalty over the fixed rate term. They just got back to me and told me that this is for partial payments only, but this is really splitting hairs, since I could have paid off $20k 5 minutes before I settled the account and received the discount.
So, my advice is keep a close eye on these buggers as they make mistakes and fees are negotiable. Also, if you can, pay off the maximum partial payment you can make without penalty before you settle, even if it’s only by a day. It’s not massive, but in my case it was over $500 I would have saved.
Perhaps you would have been better off waiting until july 1st where there are supposed to be new laws coming in to prevent banks gauging obscene fees from people when they payout or refinance loans. BTH why didn't you pay out the $20k on one day and then pay the balance on the next?
This what I do not understand anymore. If they were a real business, their best interests, are your best interests. What happened to good ethics and morals. In that event, they would be trying to save you dollars not throwing the book at you. I appreciate they are in business to make money, but to show some common decency will not hurt the billion dollar bottom line. It is amazing how many people have to use sites like this to find out truths and demystify finances, what happened to the business that cared? Okay, call me old fashion.
Whilst we're on the subject of bank horror stories…….
We were supposed to complete on the sale of a property last Friday. Our solicitors received a call from our bank (one of the big four, begins with A) 24 hours before completion to tell us that they can't find the title deed, therefore the title cannot be transferred, and completion cannot go ahead as planned.
We're still waiting to hear back from them…….
sonyasal wrote:BTH why didn't you pay out the $20k on one day and then pay the balance on the next?I was under the impression that the final figure used to calculate the economic cost was based upon the amount owing minus any allowance for additional payments over the term. There are institutions that do this, but it seems not all. And I did not check the figures until after I'd paid out.
I've lodged a complaint, but I doubt they will give in easily as this would mean having to do the same or all. However, it is contentious, and I will refer it to the ombudsmen if I don't get satisfaction, so perhaps they might cough-up just to keep me quiet, because if they are in error it could be costly for them.
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