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  • FIRST POST
    • bombblast1968
    • By bombblast1968 7th Oct 16, 12:55 PM
    • 9Posts
    • 1Thanks
    bombblast1968
    Interest Only Mortgage
    • #1
    • 7th Oct 16, 12:55 PM
    Interest Only Mortgage 7th Oct 16 at 12:55 PM
    Warning long story, appreciate your time reading and offering advice.

    I have an interest only mortgage taken out in 2006 with Alliance and Leicester which was subsequently taken over by Santander.

    I took it out at a quite difficult time whilst going through divorce, via an independent mortgage broker. The mortgage quotation he gave me was based on 10 year term at the time with him saying the term made no different to the quote as it was interest only, but I told him I wanted 25 year mortgage when the paperwork went through and I assumed that is what happened. Clearly I didn't read the paperwork thoroughly when signing, 2 years later I found out the mortgage had been contracted on only a 10 year term.

    I contacted Alliance and Leicester who said I had to take recourse with the mortgage broker and get them to contact the bank. The mortgage broker had left and his company would not take any responsibility for his advice or actions. By this time the mortgage had been taken over by Santander and I was suffering with ill health so I never pursued it.

    A few years later I contacted Santander to get the term extended and was told they could not extend the term of an interest only mortgage as they did not do them anymore. My only option was to switch to a repayment. At this time I worked part time and had 2 small children, I could not afford the payments on repayment so i had to leave it as it was.

    After trying twice more over the past 10 years and speaking with an independent mortgage adviser who was unable to get me mortgage with another lender as I didn't fit the new stricter affordability level and being unable to speak to Santander because the remaining term was too short, it was recommended I try speaking with them personally again.

    I have done this today and the results are:

    1) They still cannot extend my interest only mortgage, I have to wait until 6 months before it ends and then their interest only mortgage maturity team will write to me with my options.

    2) After spending an hour going through the other option of switching to a part interest only, part repayment mortgage, onto a fixed rate, which not only means I start paying the mortgage off and extends my term but also calculated to a lower monthly payment than I have consistently paid for 8 years, they said I failed the affordability checks and they can't offer me this.

    This seems ludicrous. I am a very good customer, have never missed a payment, have paid standard variable rate for 10 years, and have a very good credit rating.

    The total mortgage is only 61% ltv and on the above option would be 50% repayment 50% interest only.

    I have lodged a complaint with Santander but so far the words that have come from those I have spoken to is "you signed the 10 year deal", "you have not organised a repayment vehicle". Whilst I am not disputing that, though I thought I had signed a 25 year term, I have now been in discussions with them to agree a reasonable solution that reduces their current risk (not that I see any) and assures me I do not have to sell my house yet and fixes the mortgage at a rate I know I can comfortably afford. Where is the common sense in them rejecting it?

    Can I do anything about this?
Page 2
    • dunstonh
    • By dunstonh 8th Oct 16, 8:38 PM
    • 85,142 Posts
    • 50,153 Thanks
    dunstonh
    I hope you can complain. The FSA talks constantly about upholding complaints should put people back in the situation they would have been had the error not ocurred. In your case all you are asking is that you should have a 25 yr term.
    We went to an FOS meeting earlier in the year and the subject of interest only mortgages came up. The FOS said that they dont really see it as an issue as the alternative was to rent and rents typically went up whilst interest only mortgages got cheaper and the person has benefited from a rise in property value. So, they can sell up and take that profit tax free whilst had they rented they would have nothing.

    How hard is it for people to either give helpful advice in a polite/professional manner or just not say anything. Isn't that what most people were taught growing up? They could learn a lot from Martin.
    Telling the person what they want to hear just to wrap them up in cotton wool does not help. It is better that they are made aware of the issues and reasons rather than continue on false assumptions and living a lie. Once they know the issues and understand them, then the advice can be tailored. Some people are far too sensitive when reading posts on a discussion board. Especially when they try to read things into the message that are not there. Information, even when you dont like it is still information. It is not a personal attack but just a dose of reality.
    Last edited by dunstonh; 08-10-2016 at 8:57 PM.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • muhandis
    • By muhandis 8th Oct 16, 9:25 PM
    • 231 Posts
    • 87 Thanks
    muhandis
    Some people are far too impolite, rude and personal when replying to appeals for help/guidance. Especially when they take a holier-than-thou attitude, judging past events with the benefit of 20-20 hindsight.

    Obviously I'm not talking about you, my comment was just a general observation based on a few different unhelpful and rudely written replies to the OP.

    OTOH, there are quite a few mortgage advisors on these forums who get the balance spot on. Their responses are direct, to the point, based on the current situation and delivered in a professional manner befitting a financial advisor.

    Telling the person what they want to hear just to wrap them up in cotton wool does not help. It is better that they are made aware of the issues and reasons rather than continue on false assumptions and living a lie. Once they know the issues and understand them, then the advice can be tailored. Some people are far too sensitive when reading posts on a discussion board. Especially when they try to read things into the message that are not there. Information, even when you dont like it is still information. It is not a personal attack but just a dose of reality.
    Originally posted by dunstonh
    Last edited by muhandis; 09-10-2016 at 9:53 AM.
    • silvercar
    • By silvercar 9th Oct 16, 9:48 AM
    • 34,075 Posts
    • 142,458 Thanks
    silvercar
    I don't have a solution to offer but just felt compelled to comment on the nature of replies to your thread asking for advice on how to extricate yourself and your family from a difficult situation. How hard is it for people to either give helpful advice in a polite/professional manner or just not say anything. Isn't that what most people were taught growing up? They could learn a lot from Martin.

    Newbies that come upon these kind of replies on threads will be reluctant to ask for advice, fearing being judged, mocked or labelled for choices made in the past that can't be changed.

    ...
    Originally posted by muhandis
    I do agree with this. On another forum, new posters are welcomed to the board and encouraged to stick around. Board moderators also pop into threads occasionally reminding people to behave nicely.

    This is not about changing the message, but delivering it in a polite non-judgmental manner.
    • zagubov
    • By zagubov 9th Oct 16, 11:48 AM
    • 13,416 Posts
    • 118,307 Thanks
    zagubov
    There are forum rules about being nice to the newbies. In fact, being nice in general is rule 4 in the Forum Rules.
    http://www.moneysavingexpert.com/site/forum-faqs

    Some individuals may have disorders or conditions which make this difficult. We may have to make allowances for this, but we soon start to recognise when this happens
    There is no honour to be had in not knowing a thing that can be known - Danny Baker
    • Pixie5740
    • By Pixie5740 9th Oct 16, 1:31 PM
    • 8,873 Posts
    • 11,889 Thanks
    Pixie5740
    If the OP got a mortgage via a broker wouldn't any complaint regarding the mortgage be with the broker rather than the lender since the broker was the one giving advice?
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • dunstonh
    • By dunstonh 9th Oct 16, 6:46 PM
    • 85,142 Posts
    • 50,153 Thanks
    dunstonh
    If the OP got a mortgage via a broker wouldn't any complaint regarding the mortgage be with the broker rather than the lender since the broker was the one giving advice?
    Originally posted by Pixie5740
    Correct. However, the OP put his complaint to the broker and they rejected it.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • Pixie5740
    • By Pixie5740 9th Oct 16, 6:54 PM
    • 8,873 Posts
    • 11,889 Thanks
    Pixie5740
    Correct. However, the OP put his complaint to the broker and they rejected it.
    Originally posted by dunstonh
    Ah yes, the OP says that doesn't it.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • silvercar
    • By silvercar 24th Oct 16, 3:37 PM
    • 34,075 Posts
    • 142,458 Thanks
    silvercar
    Was reading the paper this weekend and saw and article that reminded me of this thread.
    It seems the Family Building Society have a mortgage that provides a mortgage and income for a few years for those not yet ready to down size.

    https://familybuildingsociety.co.uk/Mortgages/retirement-lifestyle-booster/retirement-lifestyle-booster-home.aspx
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