Mortgage Interest Rise AGAIN !!! Advice Needed Please.

dunstonh

With respect, I dont think that is a thing you can complain about. What if rates had gone down. Would there then be grounds for complaint that the fixed rates were higher than the discounted?

The complaints process is for mis-sales. It isnt for getting a decision wrong with hindsight when the future is unknown.

That said, the lending criteria here is rubbish. The OP is on interest only and cannot afford a 3% increase. The lending should never have been done in the first place. It was always asking for trouble. Who do you blame? The broker for arranging it? The lender for giving the money? The consumer who wanted the money?

k1mmie

I know Kensington carry a huge redemption - I too used them for a while as an emergency. Maybe, you can find another lender who may be able to help you remortgage and therefore pay off the redemption fee. I did this after 2 years with Kensington but it was still cheaper than paying their rates for another year. Have you spoken to a good broker to maybe put some figures together or come up with some options! As you have split with your husband, are you entitled to benefits/council tax discount to help top you up? Only small things but may help!

delboypass

I reckon you should sell the house.
It is obvious you cannot afford the morgage and i believe it will only get worse before it gets better.

Do not believe that interest rates will decrease as we are entering a future of huge inflationary pressures.

Stupid to take out a 1 year interest only morgage anyway (at discounted rate obviously discounted to tie you in)

Move to something you can afford rather than facing an uphill fight.

Take the recent house price increase when selling and invest the money wisely.

If you have no value in your house (allows interest only), let it go rather than fighting it.

If you can only afford an interest only morgage, you shouldnt havea morgage..these are also considered within sub prime investments and will be hit significantly..(only useful in a number of situations)

Crash_Gordon

Conrad wrote: »

IMPORTANT - Have you considered going for compensation? The FSA set up statutory legislation to enable this via the FOS. You dont need any third party help, just complain first to the broker (use speical delivery recorded post), then if he refuses to pay compensation go to the FSA.

YOUR COMPLAINT:

Dear broker, I cannot afford my mortgage payments given the rate rises, I wonder therefore why you did not recommend a fixed rate? Kensington had a range of fixed rate options at the time of application.

You were aware I was on a tight budget.
As an adviser the onus is on you to recommend the most suitable product given my circumstances. With this in mind surely a 3 year fixed rate would have been better.

I seek full compensation to included all loses such as the Early Repayment Charge, legal fees, new lender fees and such like I will now incur as a result of having to remortgage.

You were in a position of trust and best placed to advise me what mortgage was most appropriate given ALL of mind needs.

Where you supply copies of papers I have signed these will be checked to ensure the original signatures were genuine in all respects.

Please reply within 7days.
I will be taking this up with the FSA and FOS unless a satisfactory outcome is achieved.


.............

Rememeber poster, the onus is on the broker - you are just a lay person. He may have had you sign something which indicated you wanted a variable rate, but this you can argue is because he didnt give a fixed rate option.
Some brokers I have known will forge signatures and photocopy a genuine signature onto another document so be on guard.

Absolute rubbish. People like you ought to come with a warning attached. I hope the OP hasn't got her hopes up over the drivel you spouted there, because that line of enquiry isn't going anywhere.

To the OP - you have my sympathy, but the buck unfortunately stops with you. Better to take that on board now and deal with the situation however you can, than to waste time writing letters to your broker which will probably end up on the "idiot of the month" notice board.

Griptool

I agree with delboy, if you can get out of this situation debt free by selling to rent you'll be doing yourself a big favour.

More info would enable us to advise you better.
How much is the house worth? whats your total debt burden?

Edit;
Forget the crap about 'must be on the housing ladder', you can always buy again when circumstances have changed.

van22663

Many thanks again to the people who posted with some useful information. For those of you who are a little more critical, if you read my post correctly, I am just asking for advice as to whether the climb in rates appeared normal in your opinion. I am not asking for sympathy or to be told I am " stupid " to take out an interest only loan !
Thank you .

delboypass

The problem is we are hitting a credit crunch.

Over the last 4 years we have been living in a low credit, low interest rate society...but yet have managed to increase the UK debt burden to 5x that of the US per head...this was partially the blame of Gordon Brown, the FSA and BoE for not increasing rates at an earlier date or to put regulations in place to stop the credit boom.

For you now, in your circumstances, look to get out of property and take the gains whilst you can.

The libor rates and sub prime credit crunch are only going to drive up rates as is inflation in general.

You can probably rent more cheaply than your current interest only morgage.

Remember with an interest only morgage, you are repaying nothing so like renting from the bank...if you are never reducing capital, you will never reduce the payments...

Sorry about the £7000 redemption as this is high...! That is only part i dont like about this deal but obvioulsy in there as they gave you a discounted rate originally

Crash_Gordon

van22663 wrote: »

Many thanks again to the people who posted with some useful information. For those of you who are a little more critical, if you read my post correctly, I am just asking for advice as to whether the climb in rates appeared normal in your opinion. I am not asking for sympathy or to be told I am " stupid " to take out an interest only loan !
Thank you .

Van2263 - hope you realised my comment was aimed at another poster rather than yourself. In answer to your question- yes, the price that you're paying now is "normal" in the currently topsy turvy world of mortgage finance.

If you can meet those obligations, then all's well and good, albeit a bit painful at the moment. If you're struggling, you'll get some very good advice from people here, but you'll have to work out which advice is actually useful, and which advice is blurted out by people who have no idea what they're talking about. Your first step really should be Citizens Advice.

grey_lady

Dunstonh, with respect, that's not really helping the OP is it...
she wants to keep a roof over her and her kids head and keep
on top of her payments, its not about who's to blame.

Delboypass, not helping either - lots of economists reckon rates
will come down, in fact i do believe they already have in the US.
Telling the op she is stupid is NOT HELPFUL.

OP - I think there may be one more BOE rise before it comes back or it may drop. Can you hang in there for a couple of years until you can get on a non prime fixed rate when your tie-in comes to an end? if not it might be worth speaking to whole of market broker anyway to see if they can help.

Sapphire

grey_lady wrote: »

Dunstonh, with respect, that's not really helping the OP is it...
she wants to keep a roof over her and her kids head and keep
on top of her payments, its not about who's to blame.

Delboypass, not helping either - lots of economists reckon rates
will come down, in fact i do believe they already have in the US.
Telling the op she is stupid is NOT HELPFUL.

OP - I think there may be one more BOE rise before it comes back or it may drop. Can you hang in there for a couple of years until you can get on a non prime fixed rate when your tie-in comes to an end? if not it might be worth speaking to whole of market broker anyway to see if they can help.

In my view this is bad and unhelpful advice. The OP sounds pretty desperate – as though she really needs to get shot of a very large debt that she cannot afford. Dunstonh's and Crash Gordon's replies were sensible – the OP needs to face reality after making a major mistake in taking on such a huge debt, rather than to be told that it is all the broker's fault and that she should try to gain compensation from him.

It's absolutely stupid for anyone to take on enormous debts without doing their research and considering future implications - something that all too many people seem to have done and will now pay the price for. I just hope it isn't taxpayers who haven't been similarly seduced by the 'must buy house; it's an investment, etc.' propaganda that are going to have to support these people when they fail to repay their debts. :rolleyes:

Telling the OP that rates will fall is also not helpful - you don't know that.