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Bank entered IP Loan for P&I instead of IO

Discussion in 'General Property Chat' started by RedMarty, 27th Jun, 2016.

  1. RedMarty

    RedMarty Well-Known Member

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    Hi all,

    Just looking for some advice regarding a situation where the bank has mistakenly entered a P&I instead of IO. The paperwork was for IO only and after speaking through the original broker they have advised the bank (Assessor) has entered the details incorrectly and will backdate the loan to the original date.

    My concern is: Do they go back to the original loan amount and pay us back the principal we paid and being so close EOFY do we get a statement showing ONLY interest being paid and not P&I.

    This all happened on Thursday, so we have sent another email to the broker addressing the concerns as above.

    Anyone else been in this situation and how did you remedy it?

    Cheers.
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    they would probably not pay you back any principle - this would be a small amount if it only settled 4 days ago. Not much to worry about.
     
  3. RedMarty

    RedMarty Well-Known Member

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    I didn't explain it correctly. This loan was done several months ago and we only saw now that it is P&I. When I meant this happened on Thursday was the email to the broker and the bank.
    We are talking about $1500 in principal. I know I should have seen it earlier and advised them.

    Cheers.
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    in that case I don't think the bank will be able to reverse it and refund any principle paid. You might want to ask them to compensate you for some lost tax deductions.
     
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  5. RedMarty

    RedMarty Well-Known Member

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    Thanks @Terry_w

    Would that mean they go with the current outstanding amount.
    I thought it would be simpler to go with the original amount so I can claim the interest only...
     
  6. Greyghost

    Greyghost Well-Known Member

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    $1,500 more equity ;). Move on
     
  7. albanga

    albanga Well-Known Member

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    I would love to see this one play out!
    On current IP interest rates that's around $63 interest a year.
    Let's put you in the 37 bracket and you have lost
    about $23 in deductions a year.

    Tell the bank you plan to hold this property for 50 years so they owe you $1,000.
     
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  8. Tranquilo

    Tranquilo Well-Known Member Premium Member

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    Don't worry @RedMarty you'll still get your statement showing interest paid. You paid a little principle off, now just get them to change to IO.
     
  9. RedMarty

    RedMarty Well-Known Member

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    That's what I'm thinking too. Should ask for a 10 year IO.. Too cheeky ?