Hi All,
When I signed up for my home loan I was told there was no "exit fees" by my broker. That's all well and good.
I am re-financing now and the lender (not broker), is charging me an "lenders discharge administration fee" of $300 & anticipated "solicitors costs" of another $300.
Can someone please tell me if these are normal fees?
THanks
Hi Mal,
Thanks for that, yep was just on that site and it's just calling it something else. Probably my own fault for not combing through the discharge fees section and taking my broker's work on "exit fees".
It's only $600 in total but wanted to be sure that they can't be avoided.
Will go through my original paperwork when I get home.
Thanks
Probably my own fault for not combing through the discharge fees section and taking my broker's work on "exit fees".
It shouldn't be, that's specifically why we hire brokers, to help us navigate all the financial and legal mumbo jumbo. Unfortunately not all brokers are created equal and some chase commissions more than repeat business / word of mouth.
Still raise the issue with your lender - they're legally obligated to explain it to you fully until you understand. And make sure you keep asking questions until you're satisfied with their response. A lot of these fees can be discretionally waived under certain circumstances so it's always worth trying your luck.
Also check with your new lender (before signing on with them if you haven't already) as they'll often cover these fees to try to sweeten the deal and secure your switch.
Wrong.
The broker is there to get the sale.
They are under no obligation to act in your interest. Candidly, they are there to act in their own interest. If it helps you out, it is just a bonus.
Wrong. Brokers by law must operate under the National Consumer Credit Protection Act and provide advice that is 'not unsuitable' for their clients. They are legally obliged to not act against your interests.
They also have to disclose their commission (in NSW and Vic at least).
As with everything there is "buyer beware", and as with quite literally all forms of business people will act with ultimate self interest, but brokers do have laws to regulate their behaviours.
I had the same issues when I tried to refinance, factoring those fees it didnt make it worthwhile to refinance until a better deal came along.
yeh for me it nulls out the benefit in the first year but I think I will still see savings in the second or third year.
But quite often lenders have promotions offering a thousand or two to switch… worth waiting if your current rates arent excessive
That was pretty much what I was waiting for and yes it was nulled out for the first year only.
Haven't used a broker myself but even the banks charge a discharge fee. ANZ is a modest $120, NAB charges $350. Then there are Land Registry Fees, in our case NSW title search, NSW Mortgage and NSW Discharge of pre-existing mortgage, adding up to another $250 or so. Most banks will give you a decent $1,000 or so to cover for these costs when refinancing. I found this thread quite helpful: http://forums.whirlpool.net.au/archive/1979491
Yes those are normal fee.
In short, when the ban for exit fee was introduced in 1 July 2011. Banks started to introduce discharge fee. Discharge is approximately $300 - $350 depending on lender.
"anticipated "solicitors costs" is usually only for buying new property though. Check with your bank again.
The legal costs I was quoted for as part of the discharge fees was for the current bank lawyer to turn up on settlement/ the transfer of title for the new loan (sorry if i'm not using the correct terminology).
Frustrating hey! I hate that they can say no fees, but include hundreds of dollars in charges.
My understanding is:
Exit fees = Simply a penalty for exiting your loan early; can no longer be charged.
Discharge fees = The cost to the bank of discharging the mortgage. Usually equates to the cost of the bank attending settlement, retrieving the title from archive and the fee payable by the bank to your local land titles office fees for registering the discharge (Landgate here in WA charge around $165 for a discharge, so ~$300 for discharge fees sounds about right)
Solicitors fees = The cost of the bank hiring solicitors to draw up the discharge and associated other legal matters. $300 would like equate to around an hour of legal work.
Overall, $300 + $300 for discharge and solicitor's costs seems ok.
The exit fees I was fine with. I agreed to keep loan for 5 years to avoid them. No probs.
The rest suck. How many homes are bought and sold every day? We need a better system.
How old is your loan? Exit fees aren't allowed to be charged on loans after end of June 2011.
Discharge and settlement fees can still be charged though.
Check your original paperwork to see what fees were defined. Here's a quick guide to help you navigate the different fee terminology as well: https://www.moneysmart.gov.au/borrowing-and-credit/home-loan…