| With Mortgage and Home Loan repayments being one | | | | human mistake of entering 10,000 instead of 1,000 |
| of the biggest expenses for most of us, it is important | | | | could be very costly to you over the life of the loan. |
| to check your bank statements for errors. An extra | | | | Bank Statement Error Checker- Incorrect Deposit |
| fee here, a wrong interest rate there, and bank errors | | | | Date |
| could end up costing you thousands in additional | | | | Check that the date the bank processed the deposit is |
| interest over the life of your loan. You can either use | | | | correct. Although some types of deposits may take |
| Bank Statement Checker software or perform the | | | | several days for the bank to process, make sure they |
| check manually. So what do you check for on your | | | | have not unnecessary held up your deposit. There |
| bank statements? This article identifies ten types of | | | | have been cases of lenders accepting the deposit and |
| bank errors, with a particular focus on mortgage and | | | | waiting for up to a month to apply it to the account. |
| home loan statements where bank errors can end up | | | | During this period they have the benefit of your money, |
| costing you the most. | | | | while your interest payments are calculated on a larger |
| Bank Statement Error Checker - How Often Should | | | | balance than they should be. |
| You Check Your Statements | | | | Bank Statement Error Checker- Deposits Held In |
| So just how often should you check your bank | | | | Reserve |
| statements? Well in the good old days, when | | | | If the additional repayment is to come off the principal |
| mortgages were simple and you paid the same | | | | amount (and not sit in reserve as pre-paid interest) |
| amount each month year in and year out and received | | | | then make sure the bank correctly processes it |
| your statement in the post once or twice a year, then | | | | against your mortgage. If the deposit is applied to the |
| checking your bank statements on an annual basis | | | | principal then you will pay less interest from the date of |
| was generally enough. This may still be the case if you | | | | the deposit, as it reduces the balance on which the |
| have a fixed interest or simple variable rate mortgage | | | | interest is calculated. |
| and you make twelve equal payments in the year. | | | | Bank Statement Error Checker- Additional Fees |
| However if you have a variable rate mortgage, a | | | | If your bank charges you a mortgage administration |
| home equity line of credit, you make additional | | | | fee, make sure the total of all fees charged to you in |
| repayments, or you use an interest offset account, | | | | the year add up to the expected yearly total. That is, |
| then you'd better sharpen those red pencils and get | | | | make sure the bank hasn't "accidentally" charged you |
| ready to audit much more frequently. The added | | | | a thirteenth monthly fee in the year. For example, if |
| complexity not only means that you are more likely to | | | | your bank charges you $10 a month then make sure |
| find errors in your bank statements, but the job can | | | | your yearly total is $120 ($10 x 12). |
| become too large to leave for a once a year check. | | | | Look for any additional type of fees that have been |
| Luckily, with Internet banking it has become easier to | | | | charged to you that should not have been. Examples |
| access your statements in a timely manner, as well as | | | | include fees for reprinting statements (where you didn't |
| allowing you to download them and play with them in a | | | | request reprints), late payment fees (where your |
| spreadsheet or load them into a home loan checker | | | | payments weren't late) and dishonour fees (where |
| software package. | | | | your payments weren't dishonoured). |
| Therefore, depending on the complexity of your loan, | | | | Bank Statement Error Checker- Ancillary Services |
| you may wish to audit your mortgage somewhere | | | | Check your bank statements for ancillary services you |
| between once a month and once a year. If you | | | | don't need or didn't request. Your lender may be |
| choose to audit just once a year, then you may wish | | | | charging you for things like travel insurance, roadside |
| to perform additional checks when major events take | | | | assistance, and other non-essential ancillary services. |
| place, such as a change in interest rates, switching loan | | | | Apart from some types of mortgage insurance, most |
| products or making additional repayments. | | | | other types of services are optional. If you are not |
| Bank Statement Error Checker - Additional | | | | sure what a charge is, ask your lender to explain it. |
| Transactions | | | | Bank Statement Error Checker- Incorrect Offset |
| Starting with the obvious, check that your bank | | | | Account Calculations |
| statements do not contain additional or unexpected | | | | Interest offset accounts can be a great way of saving |
| transactions, or transactions applied twice for the | | | | thousands off your interest bill, by having the balance |
| same amount. If you normally pay interest and principal | | | | of the account work in your favour in the interest |
| amounts once a month, then incorrect transactions | | | | calculations. Unfortunately offset accounts also add a |
| should stand out. Look for additional fees, account | | | | layer of complexity to your mortgage or home loan, as |
| adjustments, charges for ancillary products (like | | | | the bank has to subtract the offset account balance |
| insurance) or other transactions that should not be | | | | from your mortgage before calculating the correct |
| there. | | | | interest charges. Bank mistakes to look for include, |
| Make sure that if there are any withdrawals from the | | | | totally forgetting to subtract the offset account |
| loan, you know what they are for. Human errors | | | | balance or only providing you with the benefit from a |
| happen, and the bank staff may accidentally withdraw | | | | portion of the balance (that is, not providing you with |
| money from your mortgage to pay a different client | | | | 100% offset). |
| (all it takes is for them to enter one digit wrong when | | | | Most mortgage bank statements will list the balance |
| typing an account number). If you don't normally | | | | and the offset amount used, along with the interest |
| withdraw funds from your account this should be a | | | | saving made from the offset account amount. If this is |
| simple check, however if you have many legitimate | | | | the case, then check that the offset account it is |
| transactions, it could require a more thorough | | | | referring to is yours, and the balance amount it is using |
| mortgage audit. | | | | looks correct. Refer to the next section on Interest |
| Bank Statement Error Checker- Incorrect Interest | | | | Calculations for more information on calculating the |
| Rate | | | | offset account benefit. |
| Once you have looked for the obvious, its time to | | | | Bank Statement Error Checker- Incorrect Interest |
| check your bank statements for the most common | | | | Calculations |
| errors. The interest rate is one of the most important | | | | Now that we have covered the simpler errors, its time |
| factors in determining how much the loan is going to | | | | to check that your bank is calculating your interest |
| cost you over its life, and therefore one of the first | | | | charges correctly. This is one of major sources of |
| things to check. Make sure the interest rate listed on | | | | errors and one that can prove to be extremely costly. |
| the statement is the same as the same rate you | | | | Unfortunately it is also one of the hardest to check for. |
| expect to be charged. If there has been an interest | | | | Even if you check your bank statements for all the |
| rate rise or interest rate fall in the period of the | | | | errors listed above, and find that all your deposits are |
| statement, make sure the date it has been applied | | | | for the correct amounts and on the correct dates, the |
| from is correct. Your bank statement should list the | | | | interest rates are all correct, there are no incorrect |
| rates used during the statement period, as well as the | | | | fees, your offset account looks correct and all the |
| date they were applied from. At this stage you are not | | | | transactions look genuine, the bank may have |
| checking the interest calculations, just that the bank is | | | | incorrectly calculated your interest amount. It could be |
| reporting the correct interest rate information. | | | | caused by something as simple as a change to their |
| Look out for this type of bank error when you first | | | | computer system causing it to pick up the wrong |
| take out a loan, switch loan types, change from fixed | | | | figures or use the balance on someone else's account |
| to variable rate or variable to fixed rate, or the bank | | | | to calculate your interest. |
| changes the interest rate for your loan. | | | | Auditing your interest calculations and checking that |
| Bank Statement Error Checker - Discount Rate Not | | | | you haven't been overcharged is something you can |
| Applied | | | | do with a spreadsheet (if you have the financial |
| If you are fortunate enough to have negotiated a | | | | knowledge). Alternatively, you can use a home loan |
| discount off the standard interest rate for your | | | | checker software package, which will do the |
| mortgage (for example, if you have a good credit | | | | calculations for you (once you have entered your loan |
| rating, are borrowing a large amount, or belong to a | | | | details). For more information on mortgage audit |
| professional association) then make sure the discount | | | | software, please refer to the Useful Tools section |
| is included in the interest calculations. If there is only one | | | | below. |
| interest rate listed on the statement, make sure it is the | | | | Bank Statement Errors Checker- What Next? |
| standard rate less your discount. If there is no mention | | | | The next step is to dig out your existing mortgage |
| of your discount and the statement only lists the | | | | statements and check them for errors. Likewise, when |
| standard rate, then check with your lender that they | | | | your next statement arrives (or if you have access to |
| are applying the discount in the interest calculation. | | | | you mortgage statement via Internet banking) check it |
| Bank Statement Error Checker- Incorrect Deposit | | | | for errors before you file it away. You may find that |
| Amounts | | | | your bank has already overcharged you. One thing is |
| If you are in a position where you are able to make | | | | for sure, if you leave them unchecked then you run |
| additional repayments over and above your normal | | | | the risk of paying thousands in extra fees and interest |
| monthly repayments, then make sure the deposit | | | | charges over the life of your loan. |
| transactions are for the correct amount. A simply | | | | |