Abbey officially warning us of their 90% LTV reviews

Kez100

Along with my reduction in mortgage payment notice I have also today received a letter pointing out the term and condition which lets them reduce my available funds if we have them unused and our home is considered to be greater than 90% LTV. Apparantly they do quarterly reviews and our next one will be February (not sure if that quarter date is just us as our mortgage started in a February)

Dan_1976

Well, they are being up front about it now. They were doing it at very short notice.

Lenders will now be very touchy for a few years!

Gorgeous_George

It makes sense but it will be interesting to know if they will apply the LTV rules equally to all mortgages.

An LTV of 90%+ is less of a risk on a house valued at £100K than one valued at £200K.

GG

dimbo61

Dont take the cut in your mortgage !
In fact if you can afford why not overpay each month.
Ask for your mortgage payment to remain static at the old ( higher ) rate.

Kez100

dimbo61 wrote: »

Dont take the cut in your mortgage !
In fact if you can afford why not overpay each month.
Ask for your mortgage payment to remain static at the old ( higher ) rate.

That's not the point of this thread. I am overpaying. By a lot.

The point of this thread is to say that Abbey are now putting in writing something they have been doing - without warning - for a while. It also - to me - means they may start doing it a lot more. TBF as time goes on and drops continue more will become involved. They seem to be writing to everyone as our full mortgage (before our offset) was 20% LTV at peak.

minimike2

Sounds like responsible lending to me.

seraphina

What does this mean? Will they take additional monies each month? Or will they ask you to make up the LTV to 90% if you find yourself valued at 92%??

Sorry for being thick!

silvercar

I wouldn't worry too much Seraphina.

Kez's use of the words "available funds" implies some sort of offset mortgage facility. I can't see lenders writing to every mortgage holder asking for a lump sum payment, they are well aware that lots of people are having enough problems maintaining normal mortgage payments without worrying about finding thousands of pounds.

Kez100

At the moment they are talking unused available funds. So, say I have available funds of £100,000 but my balance is £70,000 and they decide 90% of my home is worth £80,000 - they can reduce my available funds to £80,000. I am no worse off, indeed it is prudent lending, unless I was overpaying to save for something and then I could be in dire do dos. At least the warning would enable me to draw now on the available funds if I was saving for something before they do their February review.

I think the letter says they won't ask me for lump sum payments if I am using the available balance only take it away if I am not using it.

seraphina

Thanks guys - I did think that it was some kind of offset mortgage!