Question for mortgage brokers or people who know about home loans from bank.
If I refinance a variable interest owner occupied loan from Bank A to Bank B (< 80% property value) and then sell the home within 3 to 6 months are there any penalties from the bank?
Can the broker clawback anything from me?
What if there was a cashback offer?
Why would the broker want something?
If the broker has not had a complete conversation and not discovered your needs resulting in you selling the home so soon after refinancing then they don't deserve a penny.
If you did it just for the cashback, then losing your commission would be part of the business risk as I'm sure you'd not be the only one to do it.
Probably because banks may retract or cancel the trailing commissions if you leave the bank. Hence, broker may seek buyer fees for the work done.
not discovered your needs resulting in you selling the home so soon
Theyre there to find a suitable loan, not your personal assistant.
And how will they gauge the suitability of the loan without knowing what you need. A decent broker/banker would ask a lot of questions regarding future plans to ensure that the loan they are recommending would suit you.
@deveshwar0: People can and do change their future plans all the time. A broker is there to recommend you a loan, not be clairvoyant.
@HighAndDry: I can only partially agree to this. Yes, a brokers job is not being a clairvoyant
but a decent broker should be asking a customer about their financial goals over the next few years. However, we are talking about within 3 to 6 months. I believe the decision to sell a house won't be made lightly without extensive thinking.
I believe the decision to sell a house won't be made lightly without extensive thinking.
That's completely up to the home owner and their circumstances, and any changes to those circumstances. I've no idea why you're trying to pin this on the broker. Even if the customer already had those plans, are you saying it'd be the broker's fault if the customer was thinking of selling their house but didn't tell the broker? Why would it not be on the customer for not pro-actively telling the broker of their plans? Since when did adults turn into children who needed their hand held through every little part of their lives?
@HighAndDry: I'm not trying to pin this on the broker.
All I'm saying is that if the broker knew about the impeding sale then they should not be asking the consumer to pay them when the bank claws back the commission.
If the broker knew about the forthcoming sale then they should have advised the customer against refinancing.
If the broker did not know about it because they did not ask the right questions then the broker didn't do their job.
If the customer hid that info then the broker should wear it as a loss.
I don't understand why the customer would owe anything to the broker?
if the broker knew about the impeding sale
That's a big "if".
then they should have advised the customer against refinancing.
Still the customer's call - broker doesn't control the customer, can't force them to take their advice. God knows my job would be a lot easier if all my clients followed advice to the letter.
because they did not ask the right questions
Customer may have not answered correctly because they wanted better rates for the refi.
If the customer hid that info then the broker should wear it as a loss.
Wtf why? (Yeah, this just shouts loudly that you have a bias)
I don't understand why the customer would owe anything to the broker?
Because they signed a contract saying they would.
If the loan is a variable rate loan, then there are no penalties.
Bank cashback is generally paid after a couple of months and I don't believe there will be any clawback.
If you've gone through a broker, the broker commission will most likely be clawed back.
If you are actually are going to do this, just get the broker recommendations and then approach the financial institution independently. That way you can ensure no claw back and what you sign with that FI is what you get.
Ask your loan provider, mortgages have lots of different of conditions, I just put $200k on fixed rate and if I refinance/pay out then there is a penalty.
Usually you would have signed something with the broker. If there's a claw back clause it would be in the paperwork. They can't claw anything back which u havent agreed to (ie signed)
Having said that, often ppl sell and buy a new home. If u went thru the same broker, they would be happy to Waive it
Regarding the bank - ud have the check your mortgage docs. Theres probably discharge fees etc. But it should all be stipulated clearly
There's usually a clawback fee from the broker, but a lot of the time they'll waive it. When I did something similar, my broker wanted $1200