Got this enquiry that make my client panic. Decide to write it in my blog to educate the public.
The clause goes like this: Cancellation Clause – If the Facility is cancelled at any time after acceptance of this Letter of Offer or is left undrawn on expiry of the Availability Period, a cancellation fee of 1.5% will be charged on the amount cancelled or left undrawn.
My client thought that she needs to stay with the bank forever or pay 1.5% penalty to leave.
This is totally not true!
Cancellation clause is found in all home loan contracts with all banks. This clause means that if client decided to take up the offer by signing the letter of offer, just before when the funds are disburse (funds usually disburse after 3 months), client decided to cancel this loan and take up another bank loan, they are then subjected to 1.5% cancellation fee.
Thank you for reading