Sorry in advance for the long post :/
Hoping someone has some knowledge of my rights in this situation:
We got pre-approval for a loan for the construction of our new house back in December, this pre-approval included paying out our old loan with the same lender. Due to the size of the loan and the LVR, the lenders mortgage insurance came out to ~$13,500. At the time I thought wow, that's alot - but what can you do.
Next step, I realise that by paying out my old loan (with offset account) I no longer have the benefit of an offset account, so I ask the lender to just leave my old loan as is, as we are going to pay out this loan when we sell anyway, but to use the property as security still.
So the Loan Agreement comes out for the lesser amount (ie. without the payout for the current loan) and LMI is listed as $nil. I figure it's because the loan amount is smaller, or somehow the restructuring changed the LVR ... what do I know, I'm not a LMI expert ... so I sign it and away we go.
Fast forward to July - final payment made on our construction loan. A few weeks later I get a call from the lender saying they stuffed up and they should've charged me the ~$13,500 so they'll be deducting that from our offset account. I say "hold on a second, the loan agreement clearly shows that as $nil" and its a LOAN AGREEMENT. They say they'll get their legal team to look into it.
Just now I get a call from them saying they've looked into it, determined they have the legal right to the money (based on the pre-approval) and deducted the amount from the offset account.
So now I have $13,500 less in my offset account - money i've already committed/spent on interest free days credit card (I never thought the bank would change their mind about the LMI ... I figured their contract writing people would know what the hell they were doing).
Any thoughts? Unfortunately they're closed now, but I'll be speaking to the complaints person tomorrow - just wondering if anyone knew where I legally stand? ... as far as I can see the Loan Agreement is the legally binding contract, so they have no right to any LMI fees, as per the contract.
Thanks in advance,