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Interest Only with Abbey
SRV_2
Posts: 16 Forumite
Hi - I hope someone can give us some advice.
We took out additional borrowing from Abbey 6 months ago and then applied to change the whole mortgage to interest only. Abbey told us that we would have to wait 6 months and reapply before they considered that request - annoying as the in branch mortgage advisor didn't tell us that at the time, neither did the person we spoke to on the phone - both siad it would be very straightforward and no problem at all. We received a letter telling us we'd have to wait after we thought it was all going through. However - not the end the world.
It is now 6 mobths later and we are going to apply again. Our questions are these...
1 We have never missed or been late with a payment and have been with Abbey for 10 years - are they likely to say yes to changing our mortgage to interest only or has this all changed with the credit crunch?
2 How honest should we be? Our mortgage advisor in the the branch said that when we rang up to ask we should say that we were intending to be able to pay the balance from the sale of our home at the end of the mortgage term i.e. downsizing. She hinted very strongly that we shouldn't say anythig else. However this is not true. We actually only want to go interest only for 3years while our kids are in childcare and then when they are in school we will actually restructure our mortgage and shorten the term i.e. use the money that goes on nursery fees now to pay off the mortgage more quickly - we figure we'll have gotten used to not having that money month on month so when we have it back we may as well put it to good use! Should we tell Abbey all this or stick to the lie we were told to tell?
One final peice of info is that I am pregnant with No 2 now - due in April and then will be on maternity leave until September - should we tell them this or would it make them more cautious?
Would be really grateful for any advice,
SRV
We took out additional borrowing from Abbey 6 months ago and then applied to change the whole mortgage to interest only. Abbey told us that we would have to wait 6 months and reapply before they considered that request - annoying as the in branch mortgage advisor didn't tell us that at the time, neither did the person we spoke to on the phone - both siad it would be very straightforward and no problem at all. We received a letter telling us we'd have to wait after we thought it was all going through. However - not the end the world.
It is now 6 mobths later and we are going to apply again. Our questions are these...
1 We have never missed or been late with a payment and have been with Abbey for 10 years - are they likely to say yes to changing our mortgage to interest only or has this all changed with the credit crunch?
2 How honest should we be? Our mortgage advisor in the the branch said that when we rang up to ask we should say that we were intending to be able to pay the balance from the sale of our home at the end of the mortgage term i.e. downsizing. She hinted very strongly that we shouldn't say anythig else. However this is not true. We actually only want to go interest only for 3years while our kids are in childcare and then when they are in school we will actually restructure our mortgage and shorten the term i.e. use the money that goes on nursery fees now to pay off the mortgage more quickly - we figure we'll have gotten used to not having that money month on month so when we have it back we may as well put it to good use! Should we tell Abbey all this or stick to the lie we were told to tell?
One final peice of info is that I am pregnant with No 2 now - due in April and then will be on maternity leave until September - should we tell them this or would it make them more cautious?
Would be really grateful for any advice,
SRV
0
Comments
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Whats the LTV of your home ?
The more equity in the property the happier abbey would be to switch to IO
But with the credit crunch and lenders now being more carefull who knows until you apply0 -
What is the LTV?
And be honest - anything else is fraud0 -
LTV is 80%0
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I understand Abbey has certain criteria....Borrowers are only allowed to switch to an interest-only deal if they own more than 50% of their homes, and must also detail how they plan to repay the rest....However better hearing it from the horse's (abbey) mouth.........0
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Yep 50% if no RV, 75% with (sale of house does not count)0
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Hi,
Its actually 75% LTV max. However, if the reason is to do with affordability that you wish to change it over, you will be directed to the Debt Management Office, who will consider your request and may allow you to convert for a set period of time.
If you had a repayment vehicle there would be no problem, but you have to produce that investment. Interest Only at Abbey / Santander has changed in the last few months.I am a Mortgage Adviser
You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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