Abbey LTV "threats"

kennyboy66_2

!!!!!!? wrote: »

I think that the government will ensure that their nationalised banks don't do it - by nicking more money from those of us paying taxes. The rest of the banks, who knows?

However, the point is that it is now very much on the agenda. Before, the line was that it was just some sort of 'doom monger fantasy' or whatever....

Nationalised or not, in many cases it wouldn't make business sense to enforce it.
If a homeowner says no - what does the bank do ?

As much as some on here might be praying for respossession, it is fairly unlikely that a court would enforce it under these circumstances.

BTL may be a bit different, although I still doubt that banks will want to enforced sales.

Wappers

I have one of these mortgages, looking at the terms it works out like this:
In 2006 you buy a house for 200K with a 10% deposit (180k mortgage), there is no point adding more deposit as you can get the best rate at 90% LTV at that time.
Any extra money could have gone in the offset savings pot (you will then have instant access to it)
2008, 2 years into a 25 year repayment mortgage you will have repaid in the region of £8,000
According to the terms you can borrow this back at anytime up to 90% of the property value.
Abbey then revalue the property using the halifax index due to falling house prices in 2008. and send a letter like:

We have revalued your property and estimate the value to currently be 150k, in order to keep the LTV at 90% we have reduced the credit limit of your mortgage to 172k.

This is merely the outstanding mortgage left after 2 years repayment. This is fine, provided you have not re-borrowed the 8k. The current query is what happens if you have re borrowed this 8k, effectively you have not made any payments on your mortgage in 2 years.

space_rider

Kez100 wrote: »

I've had an abbey tracker for 9 years on - at peak prices - 15% LTV. Always been lower than my required repayment balance, but has gone up and down as we save for holidays and home improvements through it before spending out. I have never been asked to take out more debt and the only junk mail letter I have received from them was for their zero credit card.

As I have an old tracker, I only have one account which I can manage online but my savings aren't in a separate pot.

Wonder why they sending them to me. I never used to get them before the start of the credit crunch!

fatpig_2

Abbey is attempting to close the stable door after the horse has bolted! Idiots.

Zelie

Could somebody explain the term 'offset'? Is that the same as overpayments or something different?

silvercar

Zelie wrote: »

Could somebody explain the term 'offset'? Is that the same as overpayments or something different?

All your savings held with the same lender are offset against your mortgage so you only pay interest on the difference eg mortgag 70k, offset savings 20k = you pay interest on 50k. Should you need to access your savings, the money is there waiting for you.

Zelie

Ah what I call an 'upside down mortgage'. Thanks.

Gorgeous_George

silvercar wrote: »

All your savings held with the same lender are offset against your mortgage so you only pay interest on the difference eg mortgag 70k, offset savings 20k = you pay interest on 50k. Should you need to access your savings, the money is there waiting for you.

Mine works slightly differently (or not).

Using the same figures. Mortgage £70K, offset savings £20K. My monthly repayment is based on owing £70K and the interest that is earned by the £20k is used to overpay the mortgage.

GG

Wappers

With my Abbey flexible plus (Feb2006) any over payments go into the savings pot, including 'interest' on the offset sum.

It is possible to make a capital repayment at any time from the savings, however there is not really any advantage to this if you are disciplined, it just makes money unavailable for withdrawal. Although you can just borrow back from the capital to 90% LTV subject to the most recent valuation at any time.

silvercar

Gorgeous_George wrote: »

Mine works slightly differently (or not).

Using the same figures. Mortgage £70K, offset savings £20K. My monthly repayment is based on owing £70K and the interest that is earned by the £20k is used to overpay the mortgage.

GG

Mine actually operates either way. I operated it like this for a year until I realised the overpayments sat in another account doing nothing til the end of the year when they were swept across to reduce the mortgage balance. So effectively I was getting no interest or offsetting on the overpayments for the whole year. Now I just make reduced payments and increase the offset pot whenever I can.