Lloyds TSB blocks interest only mortgage switch

andys15

MissMoneypenny wrote: »

That's a lifestyle choice. Or he could work in the pub, get paid and get his drinks bought for him.



A couple of paper rounds should be enough to make up the £46 mortgage rise
.

2 paper rounds would pay £46 a week. Surely not.

Ian_Griffiths_Halifax

neverdespairgirl wrote: »

WOuld you necessarily know if a client had been repossessed?

I send them 'Welcome to your new home' cards, Birthday cards, Christmas cards, a quarterly newsletter and know when each mortgage has penalties ending and send letters reminding them of this. I keep regular contact with the clients and help people at no cost once they are a client. Many have come from referral and I have very few who don't do their next mortgage through me (until earlier in this year when the dual pricing was a problem). I'm certain, but don't know 100% that it's the case.

I was once told by the Mortgage Code Compliance Board (regulators prior to the FSA) that in the case of a Repossession, the lenders do a full investigation into the sale of the mortgage and that would include a meeting with the broker. I've never had a phone call, but I did once receive a letter for a company with a similar name, from a lender, asking them for a copy of theri clients file etc, so it seemed to stack up.

andys15

andys15 wrote: »

2 paper rounds would pay £46 a week. Surely not.

Shows I have no knowledge of what people get paid. I know when I did a paper round about 15 years ago I got about £3 a week. I dont even know what a good hourly rate is, or what the minimum is. I pay my cleaner £8 an hour, so am I ripping her off, is she taking me to the cleaners. How much an hour would a part time barstaff get.

adr0ck

andys15 wrote: »

Shows I have no knowledge of what people get paid. I know when I did a paper round about 15 years ago I got about £3 a week. I dont even know what a good hourly rate is, or what the minimum is. I pay my cleaner £8 an hour, so am I ripping her off, is she taking me to the cleaners. How much an hour would a part time barstaff get.

minimum wage = £5.73/hour

so you would need to work approx 12 hours?

andys15

andys15 wrote: »

Shows I have no knowledge of what people get paid. I know when I did a paper round about 15 years ago I got about £3 a week. I.

In fact my paper rouund was about 22 years ago. Blimey where does the time go. I was 10 I think, and was doing it illegally. It was my sisters friends round, but she used the time to meet her b/f. I was grassed up by someone as i looked about 8, and was sacked. The one and only time I have been sacked.

imfedup

fatpig wrote: »

Bravo Lloyds TSB. Hopefully this sets a precedent and other banks will follow suit. Lending large amounts of money to any half-wit that wants it has to stop.

So taking 2 years out with a clear strategy makes me a half wit, so be it I am sure there are many that disagree. I didnt go into an interest only mortgage with my eyes fixed shut, I might not be THE most intellegent person there is but I made an informed decision about what I needed to do at the time.

I agree that my circumstances may change over the 2 years but I will cross that bridge when I come to it, I will not worry about something that hasnt happened yet. But I agree that circumstances can change.

I would love to do a second job, I couldnt take my small children out at 6.30 - 7 in the morning as they are too young and the weather is too cold for them, not least I would have to wake them up putting them in a foul mood for school to deliver papers with me. If I take in Ironing, I have to declare this income, thus my tax credits would reduce and by time I have been taxed it would not be worth it, I would have to do the whole towns ironing just to get the £46 a week. I cant work in pubs (even though in the past I have done) as I have nobody to have the children. Yes I could work in a shop over the weekend cos loads of people looking for christmas staff, but who has the children? No job is beneath me, I have cleaned houses during the day before now (before I had full time job) just to get extra money.

Unfortunately, the economy is the way it is, and shortly there are going to be lots of people going for not many jobs, people WILL loose their properties whether they are on interest only OR repayment mortgages.

huntersc

Ian_Griffiths_Halifax wrote: »

There simply needs to be the correct risk assessment on the case. Stopping them completely is not the answer.

I won't respond specifically to each part of your post, perhaps next time you can post properly with quotes rather than using colour.

I do wonder about your 'expertise' when your very first point is wrong, the fact that you are unaware that banks treat people who have paid capital as well as interest differently to those only paying interest is worrying to say the least.

I sincerely hope your remit is limited to pressing a few buttons and finding a mortgage because anything beyond this concerns me greatly.

The fact that you suggested an interest only mortgage to someone that could not afford to pay a repayment is ridiculous. Tempering that by suggesting it's okay because his father is a millionaire is simply bad advice but I guess your commission increases in line with the value of a property...

I really do worry when I see apparently qualified people offering bad advice to those that may not fully understand what they are getting themselves into. Fortunately I think the role of the mortgage broker is soon to end. I really do believe that brokers have a LOT to answer forpaerticularly in enabling people to borrow more than they can afford and pushing interest only mortgages without a linked fund to top up.

Hopefully this industry is torn apart and regulated properly or banks stop dealing with brokers altogether.

huntersc

imfedup wrote: »

So taking 2 years out with a clear strategy makes me a half wit, so be it I am sure there are many that disagree. I didnt go into an interest only mortgage with my eyes fixed shut, I might not be THE most intellegent person there is but I made an informed decision about what I needed to do at the time.

I agree that my circumstances may change over the 2 years but I will cross that bridge when I come to it, I will not worry about something that hasnt happened yet. But I agree that circumstances can change.

I would love to do a second job, I couldnt take my small children out at 6.30 - 7 in the morning as they are too young and the weather is too cold for them, not least I would have to wake them up putting them in a foul mood for school to deliver papers with me. If I take in Ironing, I have to declare this income, thus my tax credits would reduce and by time I have been taxed it would not be worth it, I would have to do the whole towns ironing just to get the £46 a week. I cant work in pubs (even though in the past I have done) as I have nobody to have the children. Yes I could work in a shop over the weekend cos loads of people looking for christmas staff, but who has the children? No job is beneath me, I have cleaned houses during the day before now (before I had full time job) just to get extra money.

Unfortunately, the economy is the way it is, and shortly there are going to be lots of people going for not many jobs, people WILL loose their properties whether they are on interest only OR repayment mortgages.

I don't think it was a personal comment to people like you. There are many reasons why moving to an interest only mortgage can help. Especially if it's a short term solution. What I think many object to is the idea that it's okay to buy something you cannot afford. In your case of course there's no suggestion that you're a half wit, indeed I would suggest interest only can be a god send for many people but it needs to be done on an individual basis to help people not thrown at people by mortgage brokers to help them buy houses that will eventually destroy them financially.

imfedup

Thanks Hundersc, your right it is in individual basis. Unlike a lot of people, I didnt buy a house I couldnt afford, in fact I got a very good deal, it just became apparent after a while that with mounting debts if I went on interest only for a couple of years I could claw back money each month and its worked but only from being on this site as I have found various ways of reducing my outgoings, saving money without making the children suffer as its not their fault.

I just think that some people should think before they voice an opinion that may be hurtful to others that are trying to make the best of a bad situation.

SandC

On the whole I am in agreement with them, however I think there should be a little leeway for personal circumstances.

Having said that, it sounds to me like lenders haven't been bothering to find out about personal circumstances when giving out the mortgages so this one is setting a precedent by saying 'no more'. I doubt whether all banks will follow suit but they hopefully they will be a lot more stringent.

I originally had an interest only loan - however back in the early nineties that was the done thing. You would not have been given the money without proof that you had an endowment or similar in place alongside the mortgage interest payments. How naive of me to not realise they weren't even asking for this any more.................... I know they did last time I switched lender.
I must be doing things a bit backwards cos I fairly recently switched to repayment and paid a wodge off using what was in the endowment fund. Didn't realise quite so many were doing the opposite.

Maybe they've been going on the premise that people have been 'doing the right thing'. After all, I recall it was only the original mortgage where they made you take out their buildings insurance. Ever since that first year I might not have had any cos I have never been asked.

I too am single with no dependants, but you know what? I would like for my home to be there to be sold off if I should need nursing care at an old age. Plus if you only pay interest, at what point does your lender turn around and say 'right I would like the loan paid off now please'. If you bought it age 30 and you are still paying the interest on it with the original loan intact some 40 years later, well who is the fool then?