Kensington Finance : Advice for a 22yr old FTB :)

RedTomato

It's great that you want to help your parents but do make sure you've thought through all possible eventualities. Wish you luck with it.

barbie_babe

freestyler wrote: »

barbie babe is it 300 pounds a year over the last 3 years ? and what kinda mortgage did u take ? the one my broker has recommended is a 3 yr interest only mortgage [fixed rate] which cud b xtended for 12 more yrs

sorry for taking so long to get back to you. That is 300 over the last 3 years so a hundred a year. which is way over the amount you would pay with a bank. Are mortgage was repayment but the rate was only fixed for a year.

barbie_babe

I have just been thinking could you wait intill you have left uni and got a good job and get mortage out in your name with a bank. I think Abbey are doing 5 x your income.

freestyler

Cheers for the reply ; i know what u mean but thing is this house is for my parents..i will b living with them for another year but after that id like to make my own life u see - cant spend my whole life payin for mortgages for just my family...so im tryin to get them settled before i can start living my own life..its a bit of a risk i know,but im confident they wont fail to keep up with payments because my dad especially earns more than twice the monthly payments in pension and he wont b spending much on other things..

luckyfool

barbie_babe wrote: »

I moved in 2004 i was moving a long way from home and only had a part time job in new area i was moving to BUT my husband
a bouncy castle company we were taking with us. As we were not sure how much we would be earning in our new area we had to have a Self Certification mortgage. Our broker choose Kensington. We went with what he said as the rate was good at the time.
We moved and everything was ok when rate was good then castles started slowing down and rate kept going up. so we were struggling.
To cut a long story short are mortgage has gone up nearlly 300 pounds in three years. other normal banks wouldnt put it up this much.(we have watched the rates). Therefore i would never advise anyone to go with this company. Please please carry on renting rather than use this company.

Barbie Babe,

You appear to have taken a 1 year deal with an overhanging penalty or extended tie in. This means you get the benefit of an artificially low rate in year one, but the drawback of being tied in on a higher variable rate for a further 2 years. This will have been fully reflected in any quotations and mortgage offer. Obviously the jump when you went onto the higher variable rate will have been exacerbated by the increases in the bank of england base rate, but your broker should have run through all the details with you and made sure you could afford the reversionary variable rate. I don't like this type of deal and don't sell them, however it will have all been down in black and white in the quotes you received.

There is nothing wrong intrinsically with Kensington as a lender and they offer choices of 2 and 3 year fixed rates without any extended overhangs or penalties.

luckyfool

freestyler wrote: »

barbie babe is it 300 pounds a year over the last 3 years ? and what kinda mortgage did u take ? the one my broker has recommended is a 3 yr interest only mortgage [fixed rate] which cud b xtended for 12 more yrs

Your parents should be looking at life insurance to cover the mortgage term, and remember, what happens at the end of this 15 year term if they still owe the original balance?

Definitely speak to a second broker about mainstream lender options, and I would also look at something longer term potentially, maybe a 5 year fixed rate?

freestyler

Yeah my parents are looking at life insurance options as well..btw suppose i went with interest only mortgages for the whole 15 yr term ; if i still owed my lender the 90k then can i sell the house for say 170k [suppose i bought it for 125k] and use the 90k to pay off the remaining loan and the remaining 80k as deposit for another house id be buying ? that would work wudnt it ?

luckyfool

freestyler wrote: »

Yeah my parents are looking at life insurance options as well..btw suppose i went with interest only mortgages for the whole 15 yr term ; if i still owed my lender the 90k then can i sell the house for say 170k [suppose i bought it for 125k] and use the 90k to pay off the remaining loan and the remaining 80k as deposit for another house id be buying ? that would work wudnt it ?

True, they can repay the mortgage through selling the property, but remember your parents will have to live somewhere at that point as well.

kingkano

luckyfool wrote: »

True, they can repay the mortgage through selling the property, but remember your parents will have to live somewhere at that point as well.

Also remember that the house might not be worth more than it costs now. Prices could go down instead.... then what?

Frankandann

My feelings about Kensington are very mixed. In 2004 I was in severe debt and was in arrears with my Abbey mortgage. In order to get everything straight I asked Abbey about re-mortgaging and was told 'no chance while you have arrears ' In blind panic I went to TML and was referred to Kensington. Everything went so smoothly I think I must have taken my eye of the ball and have regretted it ever since. After a two-year fixed mortgage it has steadily increased over the last 18 months to a staggering rate of 10% even though my finances have vastly improved. Because of my age- nearly 60 - and the fact that I was made redundant last year and still unemployed I am not really in a position to change my mortgage. On the subject of missed payments I was unfortunate enough to miss one at Xmas last year. Kensington are allowing me to pay the months arrears at £50 a month on top of my existing mortgage but each month when I ring up to pay I get the third dgree about my current financial and employment status and a veiled verbal 'threat'that if I miss a payment by a day it is possible someone may have to 'call' at my home. As I said mixed feelings. They got me out of a mess in 2004 but I sometimes feel now as if I'm in a bigger one. In hindsight I would recommend that people avoid them if at all possible.