Hi folks, I understand that post July 2011, exit fees on homeloans have been abolished.
Now, this all seems too good to be true.
I want to take out a loan with CBA or someone else…. then switch to ubank. Obviously as an ozbargainer I want to incur minimal costs. Preferably, zero costs.
Any advice? What should I be wary of ?
cheers
So that someone else has already done the legwork for them :p valuation, credit checking etc
Actually, their page states that they DO do a valuation.
Unless you started out your previous loan with a fairly hefty deposit, or your LVR ratio is pretty good, I suspect you might have a hard time getting them to take you on after just 6 months. This is personal opinion only, based on the fact that your principal amount is likely to have changed very little during that first 6 months unless you've made substantial extra payments.
I'll be interested to hear how you get on if this post is still around by that time.
no worries. We'll only be borrowing maybe 30% of the property value, so hopefully we'll be ok. Will keep you posted in approx 8 or 9months time (if I remember)
The reason why UBank doesn't do new loans is cost by not having to hire an entire 'settlements' department. Refinances save them legwork - yes. Because they know you generally have good history, that you have deposit, and because they only do up to 80% they don't have to deal with a third party (Lenders Mortgage Insurance)
I also want to know this.
see above. Also, ubank have a pretty good faq section…here's the part pertaining to homeloans…
Keep in mind when you refinance, there are some fees gov't doesn't advertise. They only advertise that they helped abolish exit fees. However, bank's charge discharge fee for legitimate time and cost to them to assist you to leave. As stated usually around $300, but I'd say up to $500.
Govt' charged $99.50 to register new loan. They will charge you $99.50 to de-register your existing lender and another $99.50 to register with UBank.
Then you got to consider, UBank doesn't have a 'standard variable rate' which they discount from. Other bank's loans have that. Have you considered Bankwest's online home loan (5.97% variable $0 app fees (will change to $695 soon) $0 annual fees $0 monthly fees $0 withdraw fees) and they do new purchases as well as refinance. Good alternative.
http://www.bankwest.com.au/personal/home-loans/home-loan-pro…
Disclaimer: I work for Bankwest. however, I am unable to do online home loans.
DEFs are now illegal for new loans however the bank can still charge a discharge fee (usually $250-$350 depending on lender) and you will also need to pay for state government fees for registration and discharge of mortgage (approx $200 in NSW).
May be worthwhile checking with Ubank whether they will refinance a new loan as well. Many lenders require 6 months loan statements for refinances to be processed.
thanks very much!
I've spoken to ubank. 6 month's worth of loan statements are required - thanks ShannonIngram for that heads up.
Other than that, the guy I spoke to was courteous and professional.
I'm almost certain uBank will mortgage the property under NAB (as they do under Homeside Lending) and assuming that is the case then mortgage discharge/mortgage registration fees would not be applicable during the refinance. Maybe grab a NAB 12 month introductory rate with no application fees and refi within that time before you get stung with their standard variable rate.
thanks Hatts…. will look into this. In speaking with ubank, the guy on the other end of the phone told me that whilst the govt has banned "deferred establishment fees", one of the big 4 has retained something called a "delayed establishment fee" which (according to him) was basically the same thing as the deferred est fee…. he wouldn't tell me the name of the bank though !
Hope it's not NAB. cheers
I think you will find this is in relation to loan contracts written before the legislation change, some lenders have waived DEF's on existing contracts, others have not. AFAIK no-one is including them by that, or any other name in new loan contracts. I believe he was implying an existing loan may still be subject to a DEF due to the delay between the contract date and the legislation change provided their lender hasn't elected to waive the fee.
thanks Hatts, that makes sense.
Does anyone know why UBank only offer refinance , but not accepting a new loan?