Hi, I've been advised to "leave 10 or 20k" still owing on an offset account rather than leaving the entire loan amount in the offset account, otherwise the bank can close off the loan without your permission and pay themselves out…
I am in the process of getting my loan finalized and wanted to know what would happen if I took out a loan for 350k with 100 percent offset and bring the offset account balance to 350 k also in 1 years time . Would I still need to keep up with the monthly payments ? OR just pay only the $ 10 account keeping fee?
The reason for this being I`ll be getting this house a PPOR then in 1-2 years time changing it to IP and moving to a new better PPOR and I`m positive that I can match the loan balance and offset balance cent to cent in coming 1-2 years
Has anyone had experience with this kind of situation? Could someone please advice as I don't want to wake up one day and see my money eaten by hungry banks
Kind regards
I would love to know the answer to this too
Surely not.
The bank can't just take the money out of the offset account. Banks can close any loan but why would they unless you don't pay the interest.
You only pay interest on the balance so if you have a $350K loan with $350K in the offset there will be no interest to pay.
You can save $350K in 1-2 years? Is that what you mean by matching the loan balance?
If not, more info needed.
Hi Ash
Not sure who told you that a lender can take your funds from your offset account and pay down their loan but that is not correct.
Assuming that the loan is an interest only loan with 100% offset account and not with lenders such as St George, CUA etc then if you have $350K loan and $350K sitting in your offset account then NO interest will be payable.
Hope this clarifies the position.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
HI everyone ..thanks for the replies… @ catalyst I would be selling one of my overseas property hence sure of getting a large lump sum…
@ richard thanks for the reply … I`m going for a loan with NAB interest only , wanted to go for 10 years however could only qualify for 5 years, and the Broker said after 5 years I can just fill in a simple application and get the interest only loan term for further 5 year , is it as simple as it sounds to fill the form and get the interest only term extended ?Richard would you be kind enough to know the answers to the below examples which have been going in my head …
1: If the 7% variable interest only loan balance is 350k and the offset balance 300k then what would be my monthly repayment , would it be 7percent of 50k or still be the same .2: what will be my monthly repayment if the loan balance is 350k and the offset balance also 350k.
Richard you mentioned something about not having loan with lenders such as st george, cua etc… are there any issues with them ..
Ash
Yes thought it sounded like a Homeside loan.
If the net balance is $50k then the monthly interest repayment is $50,000 x 7% / 365 x the number of days in each month.
Yes some lenders have a pecular offset account where the repayment stays the same and the loan balance goes up and down.
Not ideal when you intend to rent the property out in the future.Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Qlds007 wrote:AshYes thought it sounded like a Homeside loan.
If the net balance is $50k then the monthly interest repayment is $50,000 x 7% / 365 x the number of days in each month.
Yes some lenders have a pecular offset account where the repayment stays the same and the loan balance goes up and down.
Not ideal when you intend to rent the property out in the future.Cheers
Yours in Finance
HI Rchard…. as you mentioned that some lenders being different from others and me wanting to rent out the property in near future , what options should I look for in a interest only loan loan with 100 percent offset , or should I just ask the bank directly if their repayments remain the same or not.
Could you give me examples of lenders which you believe or I`m sure would just charge the interest on the difference between offset and loan balance as a minimum monthly payment .
Kind regards
Hi Ash
Without being funny your Broker should be giving you this information.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Ash
Do you have a mortgage broker as yet, and if not, you ought to be giving Richard a call and ask him to be you broker. Doesn't matter where you are located or where the property you intend to buy is located, all this stuff is done on the emails and phone calls these days anyhow. Richard really knows his stuff.
If you do already have a broker and they have been unable to clear up questions such as those you've posted, you'd be well advised to sack them and call Richard.
jac
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Appreciate the wrap Jac.
Promise i will following up your deal first up Monday and report back during the day.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hehehe all good Richard, we have loads of time courtesy of the long time allowance on the finance clause on the contract of sale. I'm excited about finalising my first smsf purchase, but not stressed. I'd be stressed if I tried to arrange it all directly with the bank – it's so complicated I would have messed it up! Much nicer having you handle it all for me!
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
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