Capstone settlement...help!

LKM1983

Hello

I was wondering if i could get some advice / help about what to do next. Capstone very politely (not) state that they will not give us any advice! (not that i would go to that company for anything ever again! ha ha)

I got a letter last week from Capstone Mortgages saying:

"Capstone Mortgage Services has been authorised by Preferred Mortgages Limited to approach you with an offer to reduce the amount required to repay your mortgage provided that you repay your mortgage in full no later than 6 months from the date of this letter (23/03/10).

We are therefore please to be able to offer you a discounted figure of £83,123 which is a reduction of £15,239.61 on the current early settlement figure of £98,362.61.

Although the balance of your mortgage and consequent early settlement figure may change over time, please rest assured that during the 6 month settlement period, the discounted settlement figure will not change.

In addition to the settlement discount, if you settle the mortgage within the qualifying period, we will pay you £2,000 cashback bonus, which you can either take in cash or as a further reduction on the discounted settlement period.

To qualify for this discount you will need to maintain your full monthy mortgage payments until you are in a position to repay the mortgage in full and the mortgage must be repaid in full within 6 months of the date of this letter."

I would like to take up this offer and get as far away from them as possible. Our 2 year fixed rate ends in June and the payments will drop quite a lot as our current rate is 8.89%. The amount we purchased in 2008 was £94,000 (which was a 40% share of £235,000 house) so the amount i pay them every month is £781.78. Capstone are bleeding me dry and i am desperate to get a mortgage that isnt going to cripple me every month. I am also concious that we have hardly any savings and am worried about the costs of it all.

We were first time buyers when we purchased this property so any advice would be really appreciated! I have never missed a mortgage payment with them either.

Thanks

VIGILANT22

To be with Preferred/Capstone suggest you had adverse credit...therefore depending on yr credit file for the last 6yrs will decide whether you will be offered a rmtg by another lender....also yr lenders will be limited because of shared status.....If you manage to find another lender you may be offered free/incentives on legals and valuation...if necessary arrangements fees can be added to loan........

LKM1983

yeah i was the one who stupidly took a credit card when i was a student and i am now paying the price with a mark on my credit history, however me and my partner discussed the fact that he has always had perfect credit and earns over £40,000 so should be able to get the mortgage in his name without me holding up the process! Well that was one of the options we discussed anyway!

damoheats

Hi,

I dont understand what this is or why they have offered this discount, could someone kindly explain for a newbie?

kind regards, damien

dunstonh

Basically, Capstone want rid of the borrower and are offering an incentive to go.

They were a high risk borrower and were given a sub-prime mortgage (hence the expensive terms). This may have been due to bad credit history or whatever.

The lender wants to reduce the risk of its book and paying to get rid of borrowers it thinks are in risk of default means they take a hit now but can avoid a greater hit later.

If you get offered a discount like this and can get a mainstream prime lender now then you should jump at the chance.

jules106

I had exactly the same letter, I had a Incorrect default on my account which has subsequently been removed hence my mortgage from preferred, which is managed from Capstone. I did actually ring them before I got the letter and was told my rate would go down from 8.99% (2yrs fixed) to 3.24% above the libor... hence the generous offer !!! So, I would definently ring them asap, I will be interested to know how you get on

LKM1983

Well my partner has gone with Halifax who have offered us a great offer - my payments drop to £400 a month and they are covering our legal fees. They are keen to get moving on it all, i think they were quite sympathetic about our situation and couldnt believe how much money we pay to Capstone a month!
I spoke to Capstone and told them that we are definately interested and that we had already sorted a mortgage. Our rate with Capstone would have dropped a lot after our 2 year fixed rate runs out in June but to be honest we decided that we wanted get as far away from Capstone as possible! I will let you know if we actually get that £2,000 incentive from them!! ha ha

catkin1508

does anyone know if this is something they will be offering to all its customers approaching the end of their fixed period?? Our fixed period is up end of May and my husband is now earning a good wage, just wondering how many people have been sent these letters?? With the current LIBOR rate our mortgage would drop to approx half what it would be currently......fingers crossed they send us one too and we can get away from this awful comany

VIGILANT22

catkin1508 wrote: »

does anyone know if this is something they will be offering to all its customers approaching the end of their fixed period??

The only way to get an accurate answer is to contact Capstone and ask them...

CherryPerry

I am shared owership too and looking to sell now. I contacted them after reading this post by email and then phoned to see if it had been received. Surprise surprise they said no!! So I have faxed and posted a letter asking them to consider a reduced settlement amount. My payments dropped with the libor by over £300 so I can't be making them as much money as I used to be.

I would be interested to see how others have get on with this!

catkin1508

well im going to give them a call i think, i wonder if this is just a preferred mortgages thing as we got ours thru SPML. working out our payments with the current LIBOR rate our rate will drop to just over half what they are now. I wonder if they would consider a reduced settlement fee?? And how much should we offer as a reduced settlement?? What is a resonable amount off???