currently have split of $200k and $150k home loan on variable Principal and Interest. I am looking to restructure my loan for better management of finance due to joint application. I am interested to do $300k and $50k. When I spoke with bank, they advised that there will be credit hit on my file and they will also check serviceability again.
I am confused why they want to complete fresh credit assessment as this is just loan amount adjustment rather than getting extra loan. I have checked various bank sites but couldn’t find any relevant information around splitting of loan and credit assessment.
Can someone who split their loan guide me here please?
Hey,
Somebody correct me if I'm wrong, its been a few years since i left banking.
Whats happens is the banks write the loans then offload the loans on the secondary market.
For example your loan may not be sitting on the banks books anymore because you've fixed an amount the bank may have packaged yours with many others and sold it to say a pension fund at a discount of x basis points thus making a spread only, hence the reason why banks will charge a break free if you terminate before maturity.
For example you may have seen managed funds for mortgage funds yielding 5% generally thats purchased from banks and packaged in such a way.
As for reassessment thats probably normal lending criteria because of risk factors and banks appetite for loans from various sectors and also to do with compliance internal and external. Its a pain in the ass, but if you know a broker that will probably save you money and make your life easier as theres many other trade tricks that can be employed.
Say the bank wrote the loan 20 years ago when you first applied, as you can imagine much as happened by way of income, asset values and general local and global issues hence the need for evaluation.
As for the credit hit don't think will be detrimental. When you apply for cards sometimes they do a credit search and for loans most likely, all that shows up is a timeline of what you've asked for, if it hasn't been often and no defaults you don't need to worry.
FYI joint names will be a new loan anyway so thats why they will do the assessment.