Mortgage increased

trixxi

Hi,

i am wondering if anyone can help me understand how my mortgage payment increase is worked out.

We have an outstanding balance of £57,025.73 we have 15 years left. We were paying £440.12 per month on a rate of 4.71% ..... as the libor rate increased by 0.02% we are now on 4.73 and our mortgage has incresed by over £18 ....

does this sound right and does anyone know how we work out these figures. We called our mortgage company this morning and they told us to put it in writing and couldnt give us the figures as to how they worked it out.

Thanks.

firstaspect

. That doesn't sound right though. An increase of 0.02% should only increase it by a pound or so. However running it through a mortgage calculator http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml suggests that with repayments of £440.12 the % was lower than 4.73

TrickyDicky101

I think the % quoted (4.71%) agrees with your previous monthly repayments (I get a figure of £440.66 with 15 years to go). i agree that such a minimal increase in % to 4.73% should only push your monthly repayments up by an insignificant amount (less than £1).

Have you got your mortgage terms available? For how many months were you paying at the previous rate of £440.12? If the rate resets monthly it is possible that variances like this could result from different monthly day counts, but without knowing how your mortgage repayments are calculated (should be in the T&Cs you signed when you took out the mortgage) it is difficult to say.

trixxi

should have said our new monthly payments are 458.29 ... our mortgage people agreed they thought it was too high but when put thru to the right dept, she said put it writing? when i asked what we would be paying if the rate goes up by 1% .. based on there calculations she just said we would need to put it in writing ... this is the same company that took 3 months to update there systems with our insurance details and charges us in the process.

trixxi

A quick update from mortgage company today .. they have told us that legall fees were applied to our account £2399.00 (we paid in a lump sum to reduce our capital owed) we were led to believe the solicitors took their fees and we got what was left to pay to our mortgage. we have had nothing in writing to suggest these fees were being applied :mad:

having looked a bit closer they were paid these fees, but still noone is able to explain that they increased the libor rate because we had arrears ... we are not in arrears?

not sure quite how to tackle this.... any ideas??

TrickyDicky101

I can't follow what you are saying: what is the source of these legal fees? You don't get charged legal fees for making an overpayment.

Where does your comment "noone is able to explain that they increased the libor rate because we had arrears" come from? You have not mentioned arrears before. Who told you the increase resulted from you having arrears?

trixxi

When we made a payment to our mortgage company we also cleared a secured loan..... this is where legal fees come from.

I thought we had paid the legal fees before the mortgage company got their money... we do have figures to support this.

In the meantime the mortgage company applied these fees to the account... classed them as arrears ... increased the libor rate and in turn charged us a further £18 a month for an increase of 0.02%

We are being passed from pillar to post nad noone seems to be able to help .. in the meantime we are suppposed to pay the increase.

We have no arrears on our account, we have paid on time every month since we made the lump sum deposit,,, so it does not make sense.... i did not think the mortgage company could apply fees without at least telling us??

Thrugelmir

When we made a payment to our mortgage company we also cleared a secured loan..... this is where legal fees come from.

I thought we had paid the legal fees before the mortgage company got their money... we do have figures to support this.

Could you explain precisely what you paid and to whom. I think that your use of terminology to describe what has happened is confusing.

trixxi

We had legal fees because we paid off a secured loan and paid off some of our mortgage. We entered into a scottish government scheme where they took an equity share on our property in order for us to release some money to help clear our debts, pay off the loan and reduce our mortgage amount so that our monthly outgoings are reduced.

When we did this the lump sum of money was divided up and paid to the solicitors.. who deducted their share and paid the the rest to the relevant companies.

I am certain I cannot understand why the mortgage company have applied these fees ... we have never been notified of them.

Also .... it still doesnt answer the question as to why they could increase our monthly payments by 18 for 0.02%.

I know its all very complicated .. we are the forst people in scotland to have gone thru this so there is very little help/info out there... i hope this has made it a bit clearer!

_bankrupted

I also found reading your thread rather confusing!!

What's not clear after all this is:-

1) Do you have a smaller or larger mortgage after this equity share was taken???

If it's smaller (even after legal fees have been added) then you should be paying a reduced monthly payment.

If someone now has an equity share in your property are you paying rent to them???

Maybe an explanation of how this equity share scheme works might help.