IP to PPOR bank finds out 12 years later

Discussion in 'Loans & Mortgage Brokers' started by balwoges, 3rd Jul, 2017.

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  1. balwoges

    balwoges Well-Known Member

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    What happens when someone moves into their investment property 12 months after purchase after turfing out tenant, uses an IP loan and doesn't tell their bank. Bank has just increased payments and finds out investor is living there and has been for 12 years :eek:

    PS Its not me :D
     
  2. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    They'll end up paying the bank more for the loan.

    If they can service the loan as an owner occ loan then they should let the bank know so they can get a lower rate.

    Cheers

    Jamie
     
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  3. Scott No Mates

    Scott No Mates Well-Known Member

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    Are they in default of the loan?
     
  4. balwoges

    balwoges Well-Known Member

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    No
     
  5. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    In the cases I've experienced, you don't even need to show that you can service the loan by owner occupier criteria. A lot of people did this about 18 months ago when the pricing went up for investment lending.

    You simply need to demonstrate that you have moved into the property and they're obliged to switch the loan over. You can prove your living in the property using an electricity or water bill.

    If the loan is interest only, they may insist that it be switched to principal & interest payments.
     
  6. balwoges

    balwoges Well-Known Member

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    That's good to know ... thanks
     
  7. Corey Batt

    Corey Batt Well-Known Member

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    No real issues - people chop and change their property uses all the time. As long as there wasn't any deception at the point of application the lender isn't going to care. (ie claim to purchase the property as an investment property and then at settlement you find out they've moved in as a PPOR)
     
  8. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    I reckon that will change in the future (like everything else).
     
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  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    yep

    new APRA rule soon.

    BMI of less than 20 otherwise you will need evidence of Income protection cover

    Kidding........ but am i ?

    ta
    olf
     
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