Has my sister been badly advised by Barclays and her solicitor?

Ditch_Crawler

Afro_Thunder wrote: »

What does her being a “university graduate” got to do with anything? Lol, it’s typical of this forum; judging by the post of some forum members they should rename this forum to.....

‘MoneySavingExpert.Com Forum for school leavers only because anyone with a higher qualification(s) should know better’

What a load of poo!!

Anyway, back to topic, what do you believe will happen? Do you think Barclays will check up in a month and then boot her out of her house for not paying off 22k of unsecured debts within 30 days of completion? Don’t you think they have better things to do? Also, if her debts where such a big deal to them would it not just be simpler to just ask the couple to pay it off before completion?

(1) She received a mortgage offer from Woolwich – this means that they believe that at present she and her husband can afford the mortgage repayments in addition to their debts repayments and other expenses. If they felt otherwise, they would have either not made the offer or asked them to pay off all debts before completion. They don’t just hand out mortgages to anyone these days (as you all should know).

(2) I believe one poster mentioned that the Barclays FA/Sales rep could have “fiddled” with their application and told the underwriters that they will pay up. If this is the case, then all Barclays reps must be doing this since a lot of people who have received offers from Woolwich in 2010 have had the same condition on their offers (whether they asked for it or not). Also, what’s the difference between paying off the debt before completion and 30 days after completion? Would it not just be simpler to get it all sorted before the exchange?

(3) As I said before, the OP has received an offer from Woolwich because she at present can afford the mortgage repayments in addition to her other expenses. If this was not the case she would not have received the offer. However, Woolwich have to take into consideration that one day everything might not be so “rosy”. The customer may fall ill, they may lose their job etc and history has shown that many people who have failed to meet payments have resorted to blaming banks for being “irresponsible” when lending to them and try and weasel out of taking any responsibility. Therefore, to cover their !!!!!! for such scenarios many lenders include such conditions so that if the customer does try to plead “irresponsible lending” in the future the banks can just tell the judge that at the time “the customer could afford the repayments and that they asked them to pay off all unsecured debts within a certain time limit”.

If the OP sister keeps up with her payments she has nothing to worry about. If some of you think this is bad advice then fine.

I'm sorry, but if a bank routinely insists on imposing impossible conditions on their lenders, then they are behaving irresponsibly, and a responsible adviser/underwriter/whatever would realise that and steer clear of the bank concerned.

Also, the bank concerned would actually be driving away 'responsible' borrowers who would be unwilling to sign up to an impossible condition - why would they want to do that?

Ditch

VIGILANT22

Ditch_Crawler wrote: »

So, effectively, it was a debt consolidation deal (which has been pretty obvious to me all along).
D.

How could it be a "debt consolidation deal"...

Quote: (which has been pretty obvious to me all along).

You haven't a clue...when someone debt consolidates...it means they secure lending to pay off exisiting debts....In this case they secured lending to purchase a share!

(the clue is in the words!)

Afro_Thunder

Ditch_Crawler wrote: »

I'm sorry, but if a bank routinely insists on imposing impossible conditions on their lenders, then they are behaving irresponsibly, and a responsible adviser/underwriter/whatever would realise that and steer clear of the bank concerned.

Also, the bank concerned would actually be driving away 'responsible' borrowers who would be unwilling to sign up to an impossible condition - why would they want to do that?

Ditch

*facepalm*

If the banks believed that she was an “irresponsible” customer then she would not have received the mortgage offer. As you guys know, they don’t just hand out mortgages these days. It’s become a lot stricter and the fact that the OP sister has received one means that she (at least in the lenders eyes) is responsible.

All the lender cares about is whether the customer can meet mortgages repayments every month. If the OP sister keeps up to date with her repayments then she will never hear from the lender again. They have better things to do then waste time chasing up customers to see if they paid of the debts within 30 days. As I have said time and time again, if it was such an issue to them it would have been settled before completion. However, if one day (god forbid) she does miss a few payments and tries to play the “irresponsible lender” card then she is in trouble.

joolley

I have had 3 woolwich mortgages:

1. The first was in 2005 for £166K , 60% LTV, 1.21 x joint earnings. The offer asked that I pay off £32K worth of student loan in 30 days without recourse to further lending. I did - in that I put it on the reserve (wasn't new borrowing as had been approved already!), and then paid off in 9 months with savings.

2. The 2nd mortgage was for a second property while we still had mortgage in 1. above. £79k, 55% LTV, 0.57 x joint earnings, but we had the other mortgage mentioned above. It was not btl, so the first mortgage was considered for affordability. We were asked to pay £6.5K on 0% cc within 30 days. We did before the money was advanced.

3. Just ported mortgage #1 an increased it to £296K, 60% LTV, 2.16 x joint earnings. No mention of paying anything off within 30 days. Despite the fact that we have £5k on a 0% cc. It was 8K at the time of application in December. They asked us how much we paid monthly and when we intend to finish. We were honest and said by the end of the 0% but if any left over, we may transfer or pay in a lump, not sure.

My point, Not unusual. Nobody ever asked me another question about it. My adviser said they never checked. Doesn't necessarily mean debt consolidation. Afro's probably right. Waiting for my friend who is a Woolwich mortgage adviser to text me back about this (off the record of course).

joolley

VIGILANT22

Ditch Crawler doesn't understand Debt Consolidation.........

Afro_Thunder

joolley wrote: »

I have had 3 woolwich mortgages:

My point, Not unusual. Nobody ever asked me another question about it. My adviser said they never checked. Doesn't necessarily mean debt consolidation. Afro's probably right. Waiting for my friend who is a Woolwich mortgage adviser to text me back about this (off the record of course).

joolley

I will be surprised if his/her feedback is different to what I have said repeatedly.

Every person that I have met who has taken out a mortgage with Woolwich, at least in 2010, has found that condition on their offer. Regardless, of them being teachers, doctors, plumbers etc and the level of debt they had. If they could not afford it they would never have got the offer or Woolwich would have made them pay of the debts before completion. End of Story!

To everyone: The Doctor for example, she earned around £89k per anum (close to £200k with husbands earnings) and had £13k worth of combined debt (CC and still had 10 or so months of interest free period left). She and her husband applied for a £350k mortgage and received an offer which stated that she needed to pay off "the £13k worth of debt within 30 days of completion"!! lol

Based on previous posts and the attitude of some people towards "educated people", I suppose some of you are wondering why two Dr with a combined salary of £200k have £13k worth of debt on an interest free credit card? My answers to that are, why not and what has it got to do with the point of the question? Stop being nosey and stick to the point! Lol!! My point is that these are two professionals who could easily afford the mortgage and only had a tiny amount of debt and still Woolwich demanded that they pay it off within 30 days. They have not and still taking advantage of interest free period but when it ends they will no doubt clear it. I know it’s unusual, it’s strange, why did they not save blah blah blah....it defies everything you have been told on this forum but that’s life. Different strokes for different folks. The point is that even they got the same "pay off within 30 days" condition when in their case (two NHS and Private GP's) the debts is not even an issue.

The problem with this forum is that there are too many people asking pointless questions just for the sake of being judgemental. Does my head in!!

Ditch_Crawler

I would simply not accept the advice that I should agree to a mortgage condition which I have no chance of fulfilling - I would go elsewhere.

DC

joolley

Afro, I've put my exact mortgage loan, ltv, salary multiple and debt details to show that actually, it's probably not that unusual a request by woolwich,irrespective of size of mortgage, loan, deposit or savings.

Afro_Thunder

joolley wrote: »

Afro, I've put my exact mortgage loan, ltv, salary multiple and debt details to show that actually, it's probably not that unusual a request by woolwich,irrespective of size of mortgage, loan, deposit or savings.

I agree. As far as I am aware they make that request on all offers regardless of how much debt you have. Read my previous example about the two GP's.

Everyone: If people keep up with their payments then they will never hear from the lender again. If you dont pay and then try to play the "irresponsible lender" card then the lenders are covered with that condition since they were aware of the debts and asked the customer to pay it off. Lenders can not predict the future, someone who might be well off today could be dirt poor two years down the road. Sh*t happens!! Thats life! What are lenders meant to do, just not lend at all? Kind of defeats the point of their existance. All they can do is judge people based on their current situation, lend to those who meet their criteria and then include conditions that protect them (the lender) in the future if the customers circumstances change. If people dont like it, as Ditch said, they can go some where else but you will find that many lenders these days will be adopting this tactic.

Ditch_Crawler

Afro_Thunder wrote: »

Everyone: If people keep up with their payments then they will never hear from the lender again

I'm sorry to keep on about this!

You begin your post with the above statement, and then go on to emphasise how unpredictable the future is. But you cannot have it both ways!

The whole point of a binding contract, is that nobody can change the terms unless the contract is violated in some way.

I would not like to be around when Woolwich decides to do a sweep of all their customers who failed to comply with the 30 day condition, and then bumps up their interest rate to compensate themselves for the fact that they have suddenly found out that those customers are a greater risk than originally calculated.

Please don't say that it will never happen, because you don't know. That is precisely the sort of thing that banks do.

There is a big difference between accepting a condition and then choosing not to comply, and accepting a condition with which both you and the bank know you are unable to comply. All my comments have been intended to address the second of those two situations.

Ditch