First direct Offset mortgage help.

Morgage_Confused

On the FD website it says basicaly...

"First direct Offset Mortgages are interest only mortgages. You must demonstrate that you have a suitable repayment vehicle in place. You may choose to use an endowment policy or another investment or savings plan."

I like the idea of an offset and would typically pay monthly over and above the amount that would cover a repayment mortgage. Plus I would have offset savings. But as their offset mortgages are interest only how would I "demonstrate" I have a "repayment vehicle in place"?

What exactly are they looking for? Ive never had an endowment or any other investments and what exactly is a saving plan and how do they police such a plan anyway?

thanks guys.

HappyMJ

You don't really have to demonstrate. It's difficult to police anyway as you can stop the contributions as soon as the mortgage has started.

I would just say you are planning on using the most competitive fixed rate term ISA's that you can find and offsetting any funds in the meantime.

jonroguk

First Direct recently asked me about this as I applied for an offset mortgage. I already have an interest only mortgage where I either make over payments or pay into a Stocks & Shares ISA.

I told them this and they were happy with the arrangements. They just want to make sure you are aware of the consequences of not making any arrangements to pay the capital off.

Unless they ask for proof they are unable to check what savings you have in an ISA or non-connected account as these will not show up on a credit check.:rotfl: