Libor

upset_iva

Is any else in this situation
My fixed rate mortgage finished in jan this year and my mortgage went from approx £1000 down to approx £400 , and switched over to variable rate .
Since then every THREE months the company send me a letter increasing monthly amount , they say that my mortgage is linked to libor and has changed over the three month period.
At present the rate is 2.730% which is of course higher than the normal bank of england rate. and payment has increased to £480 .
As i am stuck in an iva until 2012 is it legal for them to do this ?:( , as i was not advised this would happen when i took mortgage out.

_Andy_

Yes it is legal - it's a variable rate so can be changed at their discretion.

TrickyDicky101

It does depend on your mortgage T&Cs - but if they state the rate is tied to Libor then fair enough. Rates can go down as well as up - it's just short term rates have been increasing in the recent past.

GMS

LiBOR has been increasing of late. Some mortgages track this rate of interest as opposed to the Bank of England rate.

Yesterday LiBOR was around 0.72% and is set daily.

Your lender will set the rates on a 3 monthly basis.

You are likely to be on a revert of LiBOR plus 2%.

Totally legal, exactly the same as if it was Bank of England plus x%.

As for not being aware of your mortgage you only have yourself to blame. It is amazing how many people would go into the deepest information for their gas supplier but will take a mortgage without a second thought.

opinions4u

upset_iva wrote: »

Is any else in this situation
My fixed rate mortgage finished in jan this year and my mortgage went from approx £1000 down to approx £400 , and switched over to variable rate .
Since then every THREE months the company send me a letter increasing monthly amount , they say that my mortgage is linked to libor and has changed over the three month period.
At present the rate is 2.730% which is of course higher than the normal bank of england rate. and payment has increased to £480 .
As i am stuck in an iva until 2012 is it legal for them to do this ? , as i was not advised this would happen when i took mortgage out.

Crikey, has it crossed your mind to dig out your original paperwork? Offer document. Key facts document.

What they can / can't do will be clearly laid in paperwork that they have already issued.

Many of the sub-prime lenders don't operate a discretionary SVR, but link your repayments to LIBOR, typically LIBOR plus 2%.

2.73% is cheaper than the majority of borrowers pay, so enjoy it while you can.

upset_iva

It.s smary people like you that got us here in the first place , you were so unregulated at that time you that you dished out mortgages any way you could get them . I'M REALLY SURE THAT YOU CHECK EVERY SINGLE WORDING OF YOUR DOCUMENTS .
since the orignal mortgage i have had three different companies take over that account which was not of my choice , so you can imagine the amount of paperwork that has come with them.

opinions4u

upset_iva wrote: »

It.s smary people like you that got us here in the first place , you were so unregulated at that time you that you dished out mortgages any way you could get them .

Are you trying to blame me for the Credit Crunch or something?

I'M REALLY SURE THAT YOU CHECK EVERY SINGLE WORDING OF YOUR DOCUMENTS .

With the single biggest financial transaction I agree to? Yes.

since the orignal mortgage i have had three different companies take over that account which was not of my choice , so you can imagine the amount of paperwork that has come with them.

But those don't change the terms and conditions of your specific mortgage.

You asked a question. I gave you what is likely to be an accurate answer. Sorry you don't like it.

You're between £500 and £600 a month better off and still bitter about something or other.

GMS

upset_iva wrote: »

It.s smary people like you that got us here in the first place , you were so unregulated at that time you that you dished out mortgages any way you could get them . I'M REALLY SURE THAT YOU CHECK EVERY SINGLE WORDING OF YOUR DOCUMENTS .
since the orignal mortgage i have had three different companies take over that account which was not of my choice , so you can imagine the amount of paperwork that has come with them.

It is not being smarmy at all. You signed for the mortgage therefore should have been aware of what you signed for. I personally do check every word of my documents and take time to explain to my clients, and make myself available to answer every question they may have.

Your mortgage being sold on I assume was 'securitisation'. This was commonplace several years ago but does not alter your mortgage. Same payments, same Direct Debit.

As for blaming the broker there is a point in time when everybody needs to take responsibility for their actions. Did you self cert your income?

Which lender were you with initially?

upset_iva

i apologise for what i said it's just frustating and i did not understand what LIBOR meant , when i asked i was just told that it would be based on the varialbe intrest rate set by bank of england . I did not self cert mortgage all my incoming and outgoings was presented to broker arranging mortgage. I have been silly with my money( i have no one else to blame ) in the past and have now had to suffer consequences . but i have faced up to it and have at least another two years to go and as i said at the beginning it is frustating as it looks like by the time i am clear of iva my mortgage payments will be the same as it was when it was fixed rate ( at present cannot move mortgage until iva finished if even then)
Once again apologies if i offended anyone i was just letting off steam.

GMS

upset_iva wrote: »

i apologise for what i said it's just frustating and i did not understand what LIBOR meant , when i asked i was just told that it would be based on the varialbe intrest rate set by bank of england . I did not self cert mortgage all my incoming and outgoings was presented to broker arranging mortgage. I have been silly with my money( i have no one else to blame ) in the past and have now had to suffer consequences . but i have faced up to it and have at least another two years to go and as i said at the beginning it is frustating as it looks like by the time i am clear of iva my mortgage payments will be the same as it was when it was fixed rate ( at present cannot move mortgage until iva finished if even then)
Once again apologies if i offended anyone i was just letting off steam.

No problem.

If it helps you can google LIBOR and get some info. The rate is set daily but lenders tend to alter it every 3 months probably to save on costs. It is NOT linked to Bank of England rates.
It is the rate at which banks lend to each other (London Interbank Offered Rate).
We have all made mistakes in the past so do not feel too bad for yours. The main thing is you have dealt with it. Once you complete your IVA hopefully you can negotiate a decent mortgage deal .
Good luck