BOS 100% Mortgage Trap

tominator

Hi Guys

I'm sure this has been asked a thousand times before but I would really appreciate any advice that people have regarding my 100% mortgage situation, although if you are one of the condescending few on here who like to deal out smug comments, please don’t. It’s not helpful, the situation is what it is and we can’t undo decisions made in the past.

When we took our mortgage everything was going swimmingly; the family business was thriving, my wife had a good job and we were comfortably making our mortgage payments as well as saving.

Then the crash…

My wife was laid off and the family business contracted massively. Luckily we had our savings to see us through the initial shock, and our fixed rate came to an end and our mortgage payments dropped.

However, we are with BOS and seem to be on an awful SVR compared to other lenders. Not sure of the exact percentage as I don’t have the paperwork with me. I have spoken to the mortgage adviser who set us up initially and he tells me that BOS are no longer in the mortgage game themselves and are filtering all new business through to Halifax and that in essence they are deliberately uncompetitive in order to try to force people away. However, they cannot offer any kind of deal with Halifax as this would not be a product shift but a move to a new lender.

So, we find ourselves in a position with no equity, our savings depleted, a much lower joint income than before and trapped in an uncompetitive mortgage.

Obviously I’m working on winning the lottery, but in the mean time any suggestions or advice as to what can be done mortgage wise would be much appreciated.

Thanks in advance,

Tom.

_Andy_

Assuming you have zero or very little equity, unfortunately you don't have any options.

Brock_and_Roll

Andy is right I am afraid. The reality is that the SVR mortgage rate that the BOS have you on is probably competitive - given your risk profile (assuming you have no equity).

From the bank's perspective, if there were to have to repo a house where there was zero equity, by the time the process was finished they would expect to lose 10%+ assuming a forced sale situation - bank's call this "loss given default".

Obviously the OP is not in a comfortable situation, and given that we are now getting the first signals that the era of ultra low interest rates may be drawing to a close, the only advice I think we can give is to save, save, save. If the OP can get to a circa 15% "deposit" then a whole range of options may open up.

TrickyDicky101

As Andy said, you don't have many options - one might be to sell up and repay the mortgage (with you needing savings to meet any shortfall once mortgage + fees are paid off) but then you would not have your house.

TinaT_2

Came into force October 2012

MCOB 11.8 2Customers unable to change regulated mortgage contract, home purchase plan or provider


MCOB 11.8.1
26/10/2012
FCA
Where a customer is unable to:
(1) enter into a new regulated mortgage contract or home purchase plan or vary the terms of an existing regulated mortgage contract or home purchase plan with the existing mortgage lender or home purchase provider; or
(2) enter into a new regulated mortgage contract or home purchase plan with a new mortgage lender or home purchase provider;
the existing mortgage lender or home purchase provider should not (for example, by offering less favourable interest rates or other terms) take advantage of the customer's situation or treat the customer any less favourably than it would treat other customers with similar characteristics. To do so may be relied on as tending to show contravention of Principle 6 (Customers' interests).

Contact FCA for general information - point out to your mortgage provider - if no change contact Financial Ombudsman for individual help.

dimbo61

SVR of 4.95% is about normal
If that is the rate you are paying?
What can you do !
1 look at ALL spending every single penny and see how MSE can help reduce your spending
2 Can you increase your income in any way?
3 Overpay the mortgage
4 Count yourself lucky that you live in your own home and not renting with a Landlord who can kick you out with 2 months notice

beecher2

You'll be on 4.95%

Have you contacted BoS directly? Have a look here
http://www.bosmortgages.co.uk/newdeals/

opinions4u

TinaT wrote: »

Came into force October 2012

MCOB 11.8 2Customers unable to change regulated mortgage contract, home purchase plan or provider


MCOB 11.8.1
26/10/2012
FCA
Where a customer is unable to:
(1) enter into a new regulated mortgage contract or home purchase plan or vary the terms of an existing regulated mortgage contract or home purchase plan with the existing mortgage lender or home purchase provider; or
(2) enter into a new regulated mortgage contract or home purchase plan with a new mortgage lender or home purchase provider;
the existing mortgage lender or home purchase provider should not (for example, by offering less favourable interest rates or other terms) take advantage of the customer's situation or treat the customer any less favourably than it would treat other customers with similar characteristics. To do so may be relied on as tending to show contravention of Principle 6 (Customers' interests).

Contact FCA for general information - point out to your mortgage provider - if no change contact Financial Ombudsman for individual help.

There are two flaws with this:

1. The original post is over 4 months old.
2. The original poster last logged on over 4 months ago.
3. Charging their standard variable rate is not exploiting the customer.

Thrugelmir

the existing mortgage lender or home purchase provider should not (for example, by offering less favourable interest rates or other terms) take advantage of the customer's situation or treat the customer any less favourably than it would treat other customers with similar characteristics.

I suspect lenders will apply lending policies in a consistent manner.

TinaT_2

I only saw the thread on 4.11.13 and apologise for the lateness of a post but thought better to post than not.

The information comes from the FCA and the rule book for mortgage lenders so it is accurate and up to date. It is specifically for people who were given a mortgage pre crash and can not get the same mortgage in the current economic climate. Therefore they are 'trapped' with the existing lender.

This may or may not be the case for Tominator but surely better to have the opportunity of receiving the information than not and then be able to follow it up.

Thrugelmir

TinaT wrote: »

IThe information comes from the FCA and the rule book for mortgage lenders so it is accurate and up to date. It is specifically for people who were given a mortgage pre crash and can not get the same mortgage in the current economic climate. Therefore they are 'trapped' with the existing lender.

If the individuals circumstances have changed sine the orginal application then this is one factor.

Secondly lenders are now operating under a different set of rules, tighter underwriting criteria and affordability rules. So an individual may no longer meet the requirements.

Given the low BOE base rate currently. Anybody struugling now is going to survive as when rates return to a normal level.