Home loan customers looking to switch lenders should never accept being charged substantial early exit fees, says leading mortgage broker Priority Lending.
Priority Lending Leura broker, Catherine Salat, said any lender trying to charge an early exit fee should be challenged as federal government changes introduced on July 1, 2011, decreed that customers shouldn’t be charged for repaying their loan ahead of time.
Ms Salat said home owners with loans pre-dating the government changes were still being slugged with early exit fees.
But she was able to help a client persuade a lender to waive the fee after consulting Australian Security and Investment Commission (ASIC) guidelines for mortgage entry and exit fees.
“I had a client who had an old low doc loan and for him to get out of it he was looking at more than $4,000 in early repayment fees even though he had had the loan for more than a decade,” she said.
“We checked the ASIC guidelines and advised the client to dispute the fee with the lender.
“The lender eventually waived the $4,000 fee as a ‘goodwill gesture’.
“Other Priority Lending brokers have told me of similar successes when clients were facing early exit fees.”
Ms Salat said customers who had wanted to get out of their existing loan or switch from one home loan lender to another previously faced thousands of dollars in early exit fees.
“Now that these fees have been abolished, it’s easier for borrowers to jump ship from their current mortgage to a chosen alternative,” she said.
“Exit fees were previously a major deterrent from switching home loans but that should no longer be the case.”
Ms Salat said an expert mortgage broker was best placed to offer advice on issues such as home loan fees.
“A mortgage broker can assess your personal circumstances and give you the best advice on the range of home loan options available and whether there are any fees and charges applicable,” she said.
Source: Priority Lending
