Barclay's End of term , forcing me to pay off loan

Leecus

I have had a mortgage with Barclay's for the last 10 years which is a lifetime tracker and in Jan 2016 the mortgage term ends. It is for apx 150k interest only.
100k of this was covered by an endowment, but the endowment maturity only realized 60k, These I have in savings waiting to pay off part of the balance

I have never been in arrears, my credit history is excellent, and all my business and personal accounts are with Barclays.
I am looking to extend the term by another 5-10 years, and am happy to place the remainder on a repayment plan.
I have spoken to Barclay about options and they have refused to extend the mortgage as according to their calcs my net disposable income wont cover it.
Ironically I have been overpaying by 300% for the last year anyway.

I am disputing this calculation as I a good part of my income is thru dividends

However, my question is this, they have said I need to talk to the collections dept and they have repeated that they will take steps to recover the balance even forcing me to sell in Jan next year. Are they being a bit over the top

If I make a reasonable offer to continue the payments even at an accelerated rate are they obliged to listen and accept the offer or can they just kick me out of my home.

By the way the 90k outstanding mortgage is on a home valued at 700k and part of my plan was to right size in about 3 years time as the house is too big, which will release funds to pay off any remainder

Can anyone offer any advice

ACG

Why have you left it so late to sort it out? You must have known for some time the endowment was going to be 40% off what you needed as they send annual statements.

The mortgage has come to an end, they are within their rights to call in the loan.

When you told them your income, did you include dividends? They would generally look to take an average of the last 2 years plus your PAYE and use that as your income (from memory), I could be a little out but that is roughly what they would use.

You can evidence overpaying so they may with a complaint be prepared to take a view on it but stritly speaking you have to pass affordabiity checks.

betmunch

Your contract has come to an end so you need to repay them. I don't think they are being over the top.


Any new agreement with the normal team will be subject to the current rules around getting a new mortgage, which it would seem that you do not qualify.


I think your best option is to discuss with the collections department. If they want to repossess a judge will take a very dim view if you are continuing to repay them and they will know this so are more likely to agree something that the normal mortgage team will not.


Good luck

amnblog

Barclays are not the only Lender on the market.

If you want to be in your home in February, get a broker involved.

Leecus

Hi All Thanks for quick responses
ACG
Why have you left it so late to sort it out? You must have known for some time the endowment was going to be 40% off what you needed as they send annual statements.
I wrongly assumed as they had all my dets, my LTV was only apx 15% and my good history that we would pass the test. I've not needed a mortgage for over 10 years and clearly everything has chnaged

I am an IT consultant and pay low wages and high divs. However, they will not include my wife's dividend payments as income as they want an SA302 from her which I do not need to complete as she is not a director. Therefore they have excluded 50% of income
Last years financial number were low, as I took 9 month off but the previous 5 years were very high. They have chosen to only use only last years, not even an average of two or three years

Betmunch
Thanks for your response, collections will not chat to me at the moment as I am 10 weeks away from end of term and they will only talk from 8 weeks. So will see what they say, although I have been told its the same dept that rejected me in the first place so not sure how this conversation will go

AMNblog
Thanks for your response
I have been out to brokers but as i took a lot of family time off this year and just started a new contract in Oct 15 many lenders want 3-6 months evidence or a min 6 months contract. (I have been contracting for 20 years) It just seems that I am in the perfect storm to not be able to get an offer just yet but hope from mar next year this may change, but still a few month short of Jan end of term.

Thanks for all your advice

ACG

Speak to your accountant. You do not NEED to do self assessments/SA302s for your wife, but you CAN.
There will (or should based on my limited understanding of HMRC) be no fines due as it was not needed (I had something exactly the same with a client of mine about 6 weeks ago). Would that then allow you to pass affordability?

dunstonh

I have spoken to Barclay about options and they have refused to extend the mortgage as according to their calcs my net disposable income wont cover it.

This is a new lending agreement. So, it has to comply with current lending criteria and affordability assessments. These are often less generous than before and they have to take into account higher rates than currently available.

However, my question is this, they have said I need to talk to the collections dept and they have repeated that they will take steps to recover the balance even forcing me to sell in Jan next year. Are they being a bit over the top

No. They are doing what they would be expected to do with someone who has failed to repay the debt in full on the agreed date.

If I make a reasonable offer to continue the payments even at an accelerated rate are they obliged to listen and accept the offer or can they just kick me out of my home.

if they accepted it then you would have defaulted and your credit record would be destroyed. They are not required to offer anything as this is not a case of arrears. This is a full default. You dont want a repayment plan. You want a new mortgage. Otherwise you can kiss your credit record goodbye.

Barclays may allow a short term extension whilst you get the S302s sorted. Alternatively, consider downsizing now and get that ball rolling. Again, Barclays may allow a short term extension if they know you are selling up.

Leecus

HI ACG

I have spoken to my accountant a few weeks back and looked on other forums. If there is no additional tax to pay, as will be the case, HMRC will ask why you have submitted, and purely for a mortgage application is not a valid reason to submit and will be rejected. My accountant has checked and confirmed this. You may have a differing view
The issue is Barclay's are applying rules that are not valid for my situation and many others. They need to take into account dividends of employees and not just directors.
If they did this I may pass tests?
Thanks for your help

ACG

I do not know HMRCs rules, all I can say is that it can and has been done and very recently.

Surely if your accountant files the SA302s online HMRC would not even get called in to a conversation? The only issue I could see with that is trying to submit previous years - I do not know if they can be done online or not.

dunstonh

he issue is Barclay's are applying rules that are not valid for my situation and many others. They need to take into account dividends of employees and not just directors.

Dividends go to shareholders. Not employees (a shareholder could be an employee or director). As there are no SA302s for her then this would indicate no officer or employee position for your wife. So, apart from being the shareholder, she has no earned income in relation to the business.

Leecus

Hi dunstonh

Sorry I did not make myself clear, my wife is a 50% shareholder and employee of my company but not a director and therefore if no additional tax is payable no SA302 is required
ACG has suggested I try to make a return and I will check with my accountant again
Thanks