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Please help - Mortgage
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MindySoo
Posts: 3 Newbie
I may well be lampooned for this but it's worth it if someone has any ideas on this...
I took out an interest only mortgage in 2007, as far as I was concerned my broker selected a 25 year term, (I was 29 when I took out my mortage) which I was happy with, I have never missed a payment and never had any problems nor do I invisage any.
I just received a letter from my provider advising me that I should check my endowment policy will yield enough in 5 years time to pay the captial - this would mean my mortgage had been provided over a 10 year term!!!
Firstly, as I said, I believed it was a standard 25 year term further compounded by the fact that I was sold a 25 year life insurance policy by the same broker at the same time, secondly, my broker didn't discuss an endowment or any kind of repayment vehicle with me - don't get me wrong I am fully aware that I will need to repay the capital at the end of the term but thought I would have 20+ years to put finances in place - no - I now have 5 years. My broker knew my financial situation and he would have 100% known that I could not raise 147,000.00 over the course of 10 years. Even if I had known and taken out an endowment surely it's impossible for one to yield that much over such a short space of time? YES I appreciate this makes me sound like an idiot - how could I not have known the term of my mortgage, even so, any thoughts on this greatly appreciated. Incidentally I have a key facts document from my broker that states 25 years......:(
I took out an interest only mortgage in 2007, as far as I was concerned my broker selected a 25 year term, (I was 29 when I took out my mortage) which I was happy with, I have never missed a payment and never had any problems nor do I invisage any.
I just received a letter from my provider advising me that I should check my endowment policy will yield enough in 5 years time to pay the captial - this would mean my mortgage had been provided over a 10 year term!!!
Firstly, as I said, I believed it was a standard 25 year term further compounded by the fact that I was sold a 25 year life insurance policy by the same broker at the same time, secondly, my broker didn't discuss an endowment or any kind of repayment vehicle with me - don't get me wrong I am fully aware that I will need to repay the capital at the end of the term but thought I would have 20+ years to put finances in place - no - I now have 5 years. My broker knew my financial situation and he would have 100% known that I could not raise 147,000.00 over the course of 10 years. Even if I had known and taken out an endowment surely it's impossible for one to yield that much over such a short space of time? YES I appreciate this makes me sound like an idiot - how could I not have known the term of my mortgage, even so, any thoughts on this greatly appreciated. Incidentally I have a key facts document from my broker that states 25 years......:(
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Comments
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Hi,
I believe the key facts document is effectively binding on the lender - I would notify them that the KFI states this.
With the effect of compound interest you should have somewhere around 20-25k saved up already.
What is your plan to pay it off in 20 years?
Gary.0 -
Speak to your broker, get him to speak to the lender and come back to you.
Youve paid him to offer a service and in my opinion that involves more than just choosing a mortgage. If there are problems then its down to them to come and sort it out.
That being said, you may be able to move to a repayment mortgage instead, which will increase your payments but you dont need to worry about enowments and all the rest of it, you also wont need to worry about what will happen in 5 years time.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Thanks, sadly, my mortgage broker has ceased trading and I wouldn't expect any joy from my lender since its NRAM.
I think I'll have no choice but to save what I can (not easy when you are caring for your elderly parents) and sell in 5 years time and hope I can at least walk away owing nothing. If I had realised it was a 10 year term I would not have proceeded, I wanted security for my parents.
Thanks again for the advice.0 -
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Gary123456790 wrote: »Hi,
I believe the key facts document is effectively binding on the lender - I would notify them that the KFI states this.
No it isn't. It is an Illustration only.
Either application form must stated 10 years which is an error by the person completing the form or a mistake was made by the lender.
The offer should have been checked by the broker, applicant and the solicitor. Solicitor should have gone through the terms with the client prior to the signing of the legal charge.
Very difficult to not know what the term of the mortgage was prior to agreeing to proceed.
Speak to NRAM and see if they will allow you to switch to repayment over a longer term.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
I must have signed it, I trusted my broker and would never have dreamed that I would be given a ten year term, i just don't understand where that length of time came from, as I say I have the illustration stating 25 years and a life insurance policy of the same length, it was my first mortgage and trusted my broker to guide me through it. I know I sound stupid but I don't understand how it was allowed to happen, I have a decent income but not decent enough to allow me to save that much money in a relatively short space of time, I would have to save over 1000.00 a month on top of my mortgage payments, one look at my bank statements and payslips it would have been obviously out of my reach. I recall discussing with my broker starting out on interest only and gradually turning an increasing percentage to repayment. I'd have needed to be pretty quick!! How was it approved by NR? I will speak with them but have read that they just want rid of the mortgages they hold? For them it would be better to force me to sell give them their money back and have the 10 years worth of interest I've paid surely?0
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I know I am going to sound silly now but can anyone explain a repayment mortgage to me do the payments over time reduce? I am currently paying 730 per month on a 106k mortgage which has 22 years to go out of 25. I am currently stuck in high interest rate which is due to end in Oct when I hope to see my payments reduce to 620 - I just want to know if and when I will see any difference in the payments as I am finding it a real struggle at the moment - Any advice on how repayment mort works would be great thanks - I know at the beginnign you are paying most of the interest but when do you start to notice a reduction in the amount you pay each month thanks0
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Sorry thought I had started a new thread didnt mean to hijack your thread xxx0
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If rates remain the same, the monthly payment doesn't change.
The debt reduces faster as the amount of monthly payment allocated to interest reduces as the debt goes down.0
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