Mortgage Prisoner

Thrugelmir

Jake368 wrote: »

Really?...I've got exactly TWO LETTERS from my lender and I've been actively searching since the second one...so what exactly is your point?...when I took out the mortgage my endowment would have easily covered it when due....now....it doesn't. My point is that the banks were bailed out at the expense of taxpayers when the economy tanked in 2008... But it didn't just tank for the banks....it also affected individuals and their endowments, retirements etc etc..I'm not looking for a handout or anything for free....I'm just looking for a little common sense to be applied.....(obviously that premise escapes you :T)

When did you first receive a warning that your endowment was unlikely to pay off the mortgage?

When interest rates started to fall how much of the saving did you use to pay down the mortgage?

AnotherJoe

I'm currently on an Interest only mortgage.

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Well just make overpayments then. What's all the fuss about ?

newgirly

We have an interest only mortgage and do make overpayments, but a surprising issue has been that we do not pass affordability to switch to repayment. We owe nearly £128k that needs clearing in just over six years, with a 10% overpayment limit that is not possible without saving to pay lump sums each time we switch deal. We have been making the payments needed in the past but are now effectively stopped from doing so due to the changes brought in.

Wakeham82

I am currently in a situation where I am on a mortgage with an ex partner. The house I am in is £30,000 in negative equity and my ex partner is trying to force my hand in to going bankrupt. At the moment I am currently married with 2 young children.
I have contacted my bank to ask about getting my ex partners name removed from the mortgage but they have said that I am unable to take the house on in my own name. I somehow think that the providing bank would rather put me on the mortgage solely rather than taking a loss through bankruptcy.
Any help with this situation would be greatly appreciated as my marriage seems to be getting torn apart.

AnotherJoe

newgirly wrote: »

We have an interest only mortgage and do make overpayments, but a surprising issue has been that we do not pass affordability to switch to repayment. We owe nearly £128k that needs clearing in just over six years, with a 10% overpayment limit that is not possible without saving to pay lump sums each time we switch deal. We have been making the payments needed in the past but are now effectively stopped from doing so due to the changes brought in.

No you aren't. Pay off the 10% allowed each year, and save additional overpayments in high savings rate accounts so you have enough to pay the rest off at the end of the six years,

dunstonh

Wakeham82 wrote: »

I am currently in a situation where I am on a mortgage with an ex partner. The house I am in is £30,000 in negative equity and my ex partner is trying to force my hand in to going bankrupt. At the moment I am currently married with 2 young children.
I have contacted my bank to ask about getting my ex partners name removed from the mortgage but they have said that I am unable to take the house on in my own name. I somehow think that the providing bank would rather put me on the mortgage solely rather than taking a loss through bankruptcy.
Any help with this situation would be greatly appreciated as my marriage seems to be getting torn apart.

Please post on your own thread rather than on someone else's thread. Your conversation is nothing to do with this thread subject and it is considered bad form to hijack someone elses topic. (you end up with two unrelated conversations in one thread which is hard to follow or you take the original poster's subject off topic and their questions get missed as you take over). A copy and paste of your post on a new thread will do the trick.

newgirly

AnotherJoe wrote: »

No you aren't. Pay off the 10% allowed each year, and save additional overpayments in high savings rate accounts so you have enough to pay the rest off at the end of the six years,

Yes, I agree and have put that in my post, but what I was saying is surely it is less risky for the bank to accept payments during the period, rather than the onus being on the mortgagee to save up a large lump sum. Being on the mse site means many of us here are probably quite money savvy, but there are many out there who are not, and won't save even if they should be.

AnotherJoe

newgirly wrote: »

Yes, I agree and have put that in my post, but what I was saying is surely it is less risky for the bank to accept payments during the period, rather than the onus being on the mortgagee to save up a large lump sum. Being on the mse site means many of us here are probably quite money savvy, but there are many out there who are not, and won't save even if they should be.

Oh I agree but you can blame the lenders slavish adherence to ill thought through regulations, and of course those who created those regulations, and their unintended consequences, for this.
Plus the mortgagees themselves for getting into these situations, such as yourself.

After all, you voluntarily entered into an arrangement where you no doubt got a better interest rate because overpayments were restricted (even if you didn't realise that, and whose fault is that?) and now you are effectively looking to renege on that deal. Is that not the case?

A perfect storm.

newgirly

In my personal case, we were on repayment and switched to interest only as a temporary measure (still on the same interest rate) as a means of saving for improvements, instead of borrowing extra. At the time we were told we would be able to switch back to repayment whenever we wanted, which after a year we attempted to do and were refused ( complicated reasons , but effectively dh bought out the company he was working for) at the time of switching to io, we were not told that we would need to pass affordability to switch to back to repayment.

So I appreciate we agreed to a 10% op limit, but we could not have known it would not let us change back