Ownhome/People for Places/Co-op - Help

jpetal

Was interested to read these posts. My hubby and I purchased our first home/house coming up to ten years in January 2019. Whilst we never would have been able to afford to buy a house at the same time I feel a little bitter as we've been paying such a high interest rate to the co-op the past 9 1/2 years and 1.75% on the equity side which we have not paid any of. We feel that it is very hard and complicated to re-mortgage under this scheme and we cannot carry on paying this mortgage after the 10 year mark. Once we reach the ten years our equity part (40%) interst will be 3.75% alonfg with the co op part of 6.49%. I feel we have paid so much interest the last ten years. Our aim is to sell complettely give them their 40% of the profit (house has increased alot in value) and move on with one mortage to a new property. We are so confused with the scheme we feel the only thing is to get out of it completely.

jpetal

We did try to re-mortgage a few years ago, although our mortgage would have been reduced £350 a month they wouldn't accept our remortgage as we owed £10000, never missed a mortgage payment though so was trying to save some money!

Garywill21

Our problem was mainly with how the marketing material says we can get a generally competitive mortgage with the co-op, but in reality we can't. We've appealed this, and also appealed to the financial ombudsmen. We were rejected there, and i've also written to the government(via MP) housing ministry. I don't really see how they can get away with it, but everyone has basically told me to 'get stuffed' but there you go.
Our remortgage alternatives basically equate to staying on the co-op svr (currently 4.7%), or drop down to just shy of 3%, but with about 1800 quid in fees for a 2 year product. Either way we would seem to be in a significantly worse situation than the scheme info suggested. We're currently on the svr. My wife is hopefully going back to work full time next year so our plan is hopefully get off this scheme as soon as possibly, but I feel that is a shame and I feel it's been mismanaged.
We were rejected by the ombudsmen as it appears we have a possible alternative to remortgage, however if you can't anywhere else it may be worth referring this to the ombudsmen as in this instance you may have a case. I believe the co-op may have to do something for you.

Either way someone, somewhere needs to hang there head in shame. This is never how a scheme to get lower income families onto the housing ladder should pan out. Essentially, we are all in the !!!!! But hey, it could be worse.
Good luck everyone xx

XAB

I thought I was alone with this problem. Have been on the scheme for 11 years in January 2019 and it’s been a regret. Co-op & Places for People have said the same to me. PfP do have a mortgage advisor you can book into speaking with, we have booked a telephone conversation - however we are due to increase to the 3% interest in Jan taking us to a hefty 9% in overall interest. As with another poster our house has gone up significantly since purchasing, which has sadly taken the opportunity to buy out the remaining 40% as unattainable.
In addition to the headache of mortgage rates, we have not been allowed to release any equity from the property to make improvements as co-op say you have to borrow from pfp and vice-versa. I also hate having to ask permission to make improvements on what is supposedly my freehold property.
We are stuck as we don’t wish to uproot our family, both our boys are in school in the area, jobs, family, friends etc etc. We have made significant improvements to the property using our savings which we have sent in the receipts to pfp, who say this will taken into account when closing our account - I will be surprised if they actually do. We have accepted this will never be our home and just figured that we will stay for another 10 years whilst the boys finish school paying whatever they throw at us and then just sell up and pay back three times more than we borrowed. Hubby made a valid point the other day, we are paying interest on the amount we borrowed (at the end of the 25 years it will be £63,000) and when we sell it will be 40% of the current market value, so pfp are essentially getting almost 4 times more than we originally borrowed so doing really rather well out of this! Shouldn’t it have been one or the other! Scheme no longer exists so the flaws must have shown st some point!
Good luck to you all I think we are going to need it!

XAB

Impressed with people who managed to get the 10 year fixed, coop only allowed us 4 years and the rest has been variable!

System

Hope this helps for those looking to payoff places for people by leaving coop remortgaging to another bank. After trying other banks that do not accept a second charge. Luckily Post office bank of Ireland was able to pay off places for people and added that onto our mortgage. So we remortgaged with post office bank of irelend then and we own the property 100%. No more coop or places for people. Just bank of Ireland and the property was just ours and places for people do not have any equity anymore as we remortgaged to pay them off. these was possible because our incoe increased and we could afford the remortgage but most importantly bank of ireland agreed to pay places for people off and add that to our mortgage. It was one of the biggest relief of our life. happened about 4 years ago. Then I looked for people that needed the advice but didnt come accross these forum then. Hope this helps anyone.

CatDew

Dear All,

I’m so pleased to have come across this thread as I would really appreciate some advice.

I bought my property using the Own Home scheme in July 2009. I was effectively forced to take out a mortgage with the Co-op, who offered me a repayment loan, at a very uncompetitive interest rate. As I was desperate, I didn’t question this, I just wanted to buy my first home!

This month, it’s my 10 year anniversary and the interest on my Own Home loan has just increased from 1.75% to 3.75% which will now continue for the next 15 years. My mortgage has also increased over the last 10 years to 4.75% and I am now paying £650 + £350 = £1000 a month and I am really struggling financially. I have over £20k debt (thankfully being managed by Step Change), so I am in no position to buy out the 40% equity and probably never will be.

With all the stories about PPI and mis selling of mortgages, I wanted to know if anyone thought it would be worth trying to seek compensation for being forced to take out a mortgage product, that in effect has been a financial burden to me. I have tried several times to reduce my mortgage interest with the Co-Op and also to release equity for home improvements, but this has been denied. I have been advised that I cannot re-mortgage as there are no other lenders that will accept a shared equity mortgage and due to my outstanding debt my credit rating is weak to say the least!. I am basically stuck in a never ending nightmare of debt and a mortgage with a company who ironically prides itself in its ethics, but will not take responsibility for ripping desperate people off with exorbitant interest rates.

Now that the Co-Op has washed its hands of the scheme, for them not take any responsibility or to offer any alternative, I think I should be entitled to claim back some of the excessive interest I have paid over the last 10 years. The scheme only lasted for 2 years, so the flaws must have been spotted, and my situation is probably a result of these flaws!

Does anyone have any constructive advise they could give me please? Has anyone had the same issue?

Thank you in advance for your help with this matter.

Mitz17

Hi, I’m so glad I googled and found this thread, although my question was different, I saw there are still people on the 10 year fixed term with coop bank after buying through Places for People!!
I had this and suddenly realised about 4/5 years ago I was paying off hardly anything off my mortgage because of the high interest rate (I wasn’t very clued up on mortgage rates and was grateful for the opportunity to buy my own home).
Anyway I’m a stress head and I was worried also about repaying the 40% equity loan.
I started to look into things and learnt, like what was said above, Coop were no longer supporting the scheme.
In a nutshell, speaking to the mortgage broken - I was able to remortgage to Barclays, Coop waived the early exit fees (they couldn’t support me wanting to remortgage to take away some of the equity loan from PfP.
Finally I was starting to see a difference, mortgage only slightly higher but I owned 75% of my home then. And overall I had a lower interest rate and was reducing my mortgage balance at a faster rate.
I then had to remortgage again and went to Santander and at that point redeemed the full equity loan from PfP.
Please move mortgage as soon as possible, there is no early redemption fee if Coop can’t support you remortgaging to redeem some or all of the equity loan. There are far better rates out there, the coop mortgage was robbery, almost all of it went towards interest, I was barely reducing the capital element.
Also be assured, PfP do take into account home improvements (with evidence) and that was not a problem for me
I wish everyone the best on this, but there is no reason to remain with Coop and please move to a better rate elsewhere, the sense of relief to feel like you are finally starting to reduce the mortgage balance is great!!
I wish I’d seen this sooner xx

Mitz17

By the way, you also mention getting interest back, I’m still very upset about that - and hence it cross my mind this morning and led me to google! I don’t know if anything can be done!! It wasn’t very sensible from a cost perspective as a gov initiative, but, I’m grateful still to be able to have the equity loan support. Catch 22!!

dimbo61

Well the COOP were at one time trying to raise as much money as possible due to other problems.
Interest rates have taken a dive over the last 10/15 years.
I was happy to fix at 4.74% in 2005 with 50% LTV
So rates were not that bad in 2009
However if you can remortgage to another lender and have some equity in your home you can get some excellent deals IF your credit score is OK !!
Speak to a Whole of Market Mortgage Broker