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Old 19.03.2014, 18:04
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Promise of Payment

Dear all
Is anyone aware of what is the penalty clause to escape a "Promise of Payment"?
The property we are looking at is still under construction and we are required to provide a "Promise of Payment" + 20% currently of which 10% will be mortgage. However, if this bank who gives the "Promise of Payment" does not offer interesting rates at the time of actually fixing the 80% mortgage, I want to be able to switch my bank.
This is a very difficult question to pose to the bank They always keep telling me they are not interested in just the 10% so its either everything or nothing.

Any inputs much appreciated
Thanks
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Old 19.03.2014, 18:26
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Re: Promise of Payment

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Dear all
Is anyone aware of what is the penalty clause to escape a "Promise of Payment"?
The property we are looking at is still under construction and we are required to provide a "Promise of Payment" + 20% currently of which 10% will be mortgage. However, if this bank who gives the "Promise of Payment" does not offer interesting rates at the time of actually fixing the 80% mortgage, I want to be able to switch my bank.
This is a very difficult question to pose to the bank They always keep telling me they are not interested in just the 10% so its either everything or nothing.

Any inputs much appreciated
Thanks
It's going to cost you to change. Are rates offered really that different for the same term / risk? I would be surprised if there was a huge difference.
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Old 19.03.2014, 18:52
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Re: Promise of Payment

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It's going to cost you to change. Are rates offered really that different for the same term / risk? I would be surprised if there was a huge difference.
Cartels are not banned here so usually bank rates are pretty similar wherever you look.....
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Old 19.03.2014, 19:30
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Re: Promise of Payment

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Dear all
Is anyone aware of what is the penalty clause to escape a "Promise of Payment"?
The property we are looking at is still under construction and we are required to provide a "Promise of Payment" + 20% currently of which 10% will be mortgage. However, if this bank who gives the "Promise of Payment" does not offer interesting rates at the time of actually fixing the 80% mortgage, I want to be able to switch my bank.
This is a very difficult question to pose to the bank They always keep telling me they are not interested in just the 10% so its either everything or nothing.

Any inputs much appreciated
Thanks
Is there really a bank anywhere that would agree to that? I doubt it very much. They want all your business, not just a measely 10%.
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Old 19.03.2014, 19:43
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Re: Promise of Payment

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Is there really a bank anywhere that would agree to that? I doubt it very much. They want all your business, not just a measely 10%.
If they do it with no strings attached it will be very expensive
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Old 19.03.2014, 20:46
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Re: Promise of Payment

Thanks guys. I am also thinking on similar lines. Probably the rates would be off a few bps for the same conditions. I should just place confidence in them and go ahead.
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