I made a careless mistake - arrears

I've just refinanced and will have 4 loans drawing the repayments from a new offset account. I'm carefully monitoring it to make sure the first payments for each loan go through without a hitch.

I'm topping up the funding account monthly from my salary. I've set that up to be 20% above the expected total repayments required each month.

It's also wise to setup minimum balance alerts on the accounts used to fund loans.

 

Sorry to hear that. Hasn't happened to me (touch wood) but this is my system to avoid missing payments

1. Set up indefinite periodic automatic transfers from account where all funds are kept (eg: home loan offset account) to the interest-drawing account. Payments are made 1 week before the next deduction as a buffer to account for weekends, bank system downtime etc. The period of payment is same as the period of the loan.

2. Keep ~1k extra in each interest-drawing account for extra deductions (package fees, 31day months etc). Would consider +1 extra payment if the interest-drawing account is an offset account.

3. Revise payment amount whenever interest rate on a loan changes.

 

FWIW, I also have this problem. Its something I wish I could manage better. Too many accounts, and payments all on differing cycles, some fortnightly, others monthly (some mid month, others on day x)...

It would work if I just had everything linked to one common offset account and that would be worry free except the ppor has to be done differently because thats a joint loan and the rest arent... too complicated.

 

Feel your pain @Taku Ekanayake, I've got fingers crossed for ya mate. If payments were left to me to make on time and not my wife, banks would never lend me to even buy a toothbrush.

Good luck buddy

 

When I refinanced to CBA, they didn't give me the option to choose which account I would like to use to pay for the loan monthly.. they filled up the details with a new offset account.. by the way i was going to have three offset with them and it was confusing which one at first when it was in the application process.. after settlement, i created a new offset which i will use for all the loan repayment.. rang them and visited the bank to double check they have changed the details..

i think its always best to be extra cautious after settlement to recheck which account will be debited.. every bank seems to be different.. some are jus straight forward fill up which account to use..

All the best.. CBA loan department is a bit painful to deal with..

 

Actually, it's not only CBA, all the other banks are similarly messy for the loan setup.
I have some clients with St George offset account was not linked with loan account. Hence, the cash parking at offset account was never offsetting the interest for 3 years. After a month of investigation, St George realised it was its internal error and willing to refund all the extra interest charge during the years.

 

don't worry it happens to many people - i've missed a few payments sometimes too.

 

Genworth's serviceability calculator is reasonable so I wouldn't be concerned on that front - the late payments themselves are the issue at hand.

I'd generally evidence that over x loans you're meeting your repayments without issue and this is a one off/non systemic issue - a signed letter from the client goes a long way.

I wouldn't be super concerned by this if it's made it past CBA's credit scoring system without fail.

 

Thank you all for the feedback. Much appreciated.

My broker spoke to his BDM and the policy for CBA is - if the arrears in question is less than $1,000, then it won't have to go to Genworth for assessment.
My arrears were $726.53(+$20 late payment fee) and $206.33 (+$20 late payment fee) = $972.86.

This means I have just snuck in within their guidelines according to the BDM, but it still hasn't been approved so it could definitely go pear shaped still.

Regardless of the outcome, it's a lesson learnt. To keep a clean loan repayment system. I went into CBA and It's now all being debited from one account only.

 

Dodged a bullet Taku!

And thanks to your lesson i'm making phone calls to clean up/simplify mine right now....

 

Actually it might not be so black and white - we have now been notified from one assessor that the 'below $1,000 rule' is for defaults only. Not arrears. Which is baffling because a default is worse than an arrear.

We shall wait and see what happens

 

Home loan arrears are worse than defaults for home loan lenders.

 

Make sure you show them the ANZ printout / account with money in it at time of arrears.

 

This is what I would do, don't talk about it, show them.

I had this happen with a new loan twice before at the start of the loan with another lender, but it never made any difference getting money from them again (that I know of) APRA put an end to that though

 

F@$#% YES!!! It got approved!
It went to Genworth for assessing and it still managed to pass!

I was prepping myself to wait another 3 months and reapply. Many thanks to everyone for the advice on this thread.

VICTORY!

 

Good stuff, rule no #1....don't panic if a minor genuine mistake, it won't be the last the more places you have

 

Great news Taku!

 

CBA seem to be the pits, I had missed payments calls, texts and emails from them for the first 3 months of one of my new loans. They did not read the loan application I filled out where I specified where the funds were to come from (not a CBA account), then asked me to physically fill out a form and bring it into a branch (despite emailing them the original loan form again to show their error), then they didn't type in the complete loan account number (only the first few numbers of an account). It took months to resolve and each time they refunded the fee and said it would not be registered on their system. I haven't applied again with them and did not think it would be an issue.

CBA are the only ones, I find St George to be even stupider, they made a mess of my accounts for months on end. Constant vigilance of accounts for the first few months of a new IP is the only way.

 

Always operate 1 x hub offset account. All rents and all salary go in there. All repayments go out of there. All bills are paid from there.

If you are moving funds to an external lender to make a payment, set up a recurring payment on your internet banking, and always set it for 4 days before it is due, to allow for long weekends or public holidays .

I dont really understand why anyone needs to make it any more complicated than that.

 

Which account does NRAS go into?