Woolwich Offset Mortgage

Floxxie

What would happen if I paid off my Woolwich offset mortgage but had £100k (secured loan) outstanding? I've tried to find the answer but all I can find is that the secured loan must be paid off at the end of the mortgage term.

Does the mortgage term mean the date that the mortgage is paid off or the date that it was expected to be paid off e.g. in ten years time?

TIA

Thrugelmir

The secured loan could have a different term to that of your mortgage.

The mortgage expiry date is the date by which the debt must be repaid in full. Failure to do so leaves you in breach of the terms and conditions of the mortgage.

Wendy_Cochran

At present the Woolwich have a first charge on your property and the secured loan is a second charge. If you pay off the Woolwich then the secured loan moves up to the first charge.

Many secured loan companies are not able to offer first charge loans as they fall under the residential mortgage rules. So they may no longer be able to lend. Up until the mortgage market review second charge loans were not regulated by the FCA.

getmore4less

Is the secured loan with the Woolwich?

Floxxie

Thanks for the replies. The secured loan is with the Woolwich - essentially what I have done is paid down the mortgage using the reserve fund (secured loan). The mortgage is due to end in 10 years.

Floxxie

Wendy_Cochran wrote: »

At present the Woolwich have a first charge on your property and the secured loan is a second charge. If you pay off the Woolwich then the secured loan moves up to the first charge.

Many secured loan companies are not able to offer first charge loans as they fall under the residential mortgage rules. So they may no longer be able to lend. Up until the mortgage market review second charge loans were not regulated by the FCA.

Is the Woolwich able to offer first charge loans?

Thrugelmir

Floxxie wrote: »

Thanks for the replies. The secured loan is with the Woolwich - essentially what I have done is paid down the mortgage using the reserve fund (secured loan). The mortgage is due to end in 10 years.

In that case the 2 accounts will be interlinked.

Floxxie

Thrugelmir wrote: »

In that case the 2 accounts will be interlinked.

So can I pay off the mortgage and then pay off the secured loan as long as it is done within 10 years?

TIA.

getmore4less

Floxxie wrote: »

Thanks for the replies. The secured loan is with the Woolwich - essentially what I have done is paid down the mortgage using the reserve fund (secured loan). The mortgage is due to end in 10 years.

The reserve fund is not really a secured loan it is part of the mortgage and AIUI covered by the same charge.


Get your T&C out it is in the docs what the rules are.


I would have to check what happens if you fully pay off the mortgage account as I can't remember so you might as well check yourself.


You do have to have both accounts(mortgage, current account) paid off at end of term.


Why have you done this what was your reasoning?

Floxxie

Thanks. It has a separate charge to the mortgage charge on the deeds. The t&cs just mentioned about paying it off at the end of the mortgage term.

The reason behind why I have paid down the mortgage with the 'overdraft' is that I am divorced and part of the settlement meant that his name was removed from the deeds as a legal owner but he has had to remain on the joint mortgage. Barclays are sending him out copies of all communications and have continued to allow him to have a joint debit card, meaning that if there was any 'overdraft' available, he could withdraw the money.

If I pay down any money on the 'overdraft' I then have to call up and ask them to reduce the limit. I tend to pay off small amounts at a time so this would not make sense to me so I thought I would clear the mortgage first and hopefully by then the house will have sold and I can clear the 'overdraft' and get rid of the ex altogether.

Hope that makes sense!

getmore4less

OK that's a use I had not thought about. Thanks can add it to the list.


Probably a wise move to have it maxed out if Barclays won't cooperate restricting access to drawdown on the OD.


At least you can still offset with protected money in a sole savings account to save on interest no need to muck about reducing the OD, just need to check the payment.


I think you should be able to have Barclays adjust the payment to just cover the interest and capital payment to stay on full term, it's one of the options on my Barclays offset with a small residual mortgage this would be tiny bits of capital and then you just need to keep an eye on the OD limit.


No idea what happens if the mortgage account hits zero although the net offset is still in debt.


would not surprise me that Barclays staff won't know either.