Nationwide increase monthly payments on fixed rate deal

Money_Worry_Wort

Thrugelmir wrote: »

Why should the tenant be pay it? You are in effect running a business so you take both the rewards and risks of the venture. If the property is your pension fund then subsidise it.

Mortgage interest is offsetable against rental income. So I assume from your comments that you aren't declaring this income to HMRC.

The Nationwide is losing income for precisely the reason you state "Our tenant will leave and then we will default on the mortgage". Hence why it needs to charge a rate that reflects the risk.

We make absolutely no income on the property and therefore have nothing to declare. We already subsidise the mortgage by £50 per month, so this would be an additional £180 on top of that. We are not clearing any of the equity and are purely interest only. Again so not currently any rewards as you mentioned above.

opinions4u

Thrugelmir wrote: »

Back then, what were considered reasonable grounds to grant CTL to the borrower?

Change of employment location including working overseas, with an intention to return, was the main reason.

I don't recall "inability to sell" or "waiting for the housing market to recover" or "I've just move in with the divorcee round the corner" being considered.

Thrugelmir

Money_Worry_Wort wrote: »

We make absolutely no income on the property and therefore have nothing to declare. We already subsidise the mortgage by £50 per month, so this would be an additional £180 on top of that. We are not clearing any of the equity and are purely interest only. Again so not currently any rewards as you mentioned above.

Then I would suggest selling the property. As its difficult to see where you are heading by retaining the property, except ultimately more expense and potential losses. Unless you can afford to start making inroads into the capital balance owed on the mortgage.

Also you wouldn't meet the criteria for a BTL mortgage in any event.

Thrugelmir

opinions4u wrote: »

Change of employment location including working overseas, with an intention to return, was the main reason.

I don't recall "inability to sell" or "waiting for the housing market to recover" or "I've just move in with the divorcee round the corner" being considered.

That's what I thought. I've struggled to find other reasons which would form the basis of a successful appeal, which would constitute any unfairness or unreasonableness on the part of the N\W. Any suggestion on the part of the borrower that they are running a business for "profit" will undermine their position considerably. A 1.5% interest loading isn't excess either in commercial terms. N\W can most likely justify this in terms of extra administration etc in dealing with the number of CTL cases on their residential loan book.

This is the legacy of the Labour Governments request that lenders dealt with borrowers in a "helpful" manner. The support schemes have all expired now and lenders are returning to applying normal commercial terms to loans.

Vincenzo

Thrugelmir wrote: »

Back then, what were considered reasonable grounds to grant CTL to the borrower?

Why do u persist with this point? Please get a copy of the Nationwide T&Cs (2001) and consult a lawyer on the meaning of "not unreasonably wittholding consent". Or a bit of research on Google would do.....

Other lenders have far more restrictive policies on CTL.

Thrugelmir

Vincenzo wrote: »

Why do u persist with this point? Please get a copy of the Nationwide T&Cs (2001) and consult a lawyer on the meaning of "not unreasonably wittholding consent". Or a bit of research on Google would do.....

Other lenders have far more restrictive policies on CTL.

Not up to a lawyer to define. Nationwide can add reasonable additional terms as think fit.

Little point in getting agitated if its not what you want to hear.

Vincenzo

Thrugelmir wrote: »

Not up to a lawyer to define. Nationwide can add reasonable additional terms as think fit.

Little point in getting agitated if its not what you want to hear.

Adding additional fees and charges is within the T&Cs. So is the contract term that Nationwide will not unreasonably withhold consent. I am not sure what your point is? As I have always said N/W T&Cs as good as promise CTL (have you even read them?). This issue was discussed because some people claimed borrowers should not have assumed continued consent. NOT TRUE.

This is a separate point entirely to the fees and charges.

Please do not make any assertions about what I "want to hear". You know nothing of my situation.

It would be nice if this thread could be left to those it affects in discussing a constructive course of action, where appropriate.

getmore4less

Vincenzo wrote: »

Why do u persist with this point? Please get a copy of the Nationwide T&Cs (2001) and consult a lawyer on the meaning of "not unreasonably wittholding consent". Or a bit of research on Google would do.....

Other lenders have far more restrictive policies on CTL.

Are NW still issueing mortgages and remortgages on 2001 T&Cs?

Vincenzo

getmore4less wrote: »

Are NW still issueing mortgages and remortgages on 2001 T&Cs?

These were the T&Cs that many of the borrowers affected (previous posters) were issued when they took out their mortgages.

N/W cannot make a material change to the contract, therefore the issue of whether CTL will be granted has not changed. What they have done is introduce the extra charges (after an initial 6 months where they will not apply). This is allowed in the T&Cs. My argument has always been that they should allow borrowers affected to move elsewhere without penalty, should they wish to.

The T&Cs do say that they will not increase the interest rate in a fixed rate period. Oh yes, this is a 'fee/charge', not an increase in interest rate! There is a famous property case that springs to mind that basically says a spade is a spade, regardless of what you call it. It was in relation to leases and licences but I believe the principle is relevant here.

Forks and Spades :: Street v. Mountford [1985]}

Lord Templeman re: the distinction between a lease and a license holding, despite the intentions of the contacting parties:
“The manufacture of a five pronged implement for manual digging results in a fork even if the manufacturer, unfamiliar with the English language, insists that he intended to make and has made a spade.”

Thrugelmir

Vincenzo wrote: »

Please do not make any assertions about what I "want to hear". You know nothing of my situation.

Well you can only fall into a couple of catergories. Doesn't require much thought to decide which one. Basic finance isn't rocket science.