Mortgage Interest Rise AGAIN !!! Advice Needed Please.

anticlaus105

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.

Hang on! What’s the complaint again? I have signed many a loan/mortgage application in my time. Before doing so however I bothered to work out if I would be able to afford it, whatever the circumstances were to change to. If I was unable to I would accept the resultant outcome. Is it you now expect the OP to blame someone else? Is the oh dear someone has crashed into me at 2mph, I must now sue for whiplash brigade at work here?

OP, Please take responsibility for your own actions with this no matter how painful. You took the loan in good faith. If you can’t pay then hand the keys back. Someone who can pay will pick it up later. If you hadn’t paid an over inflated price in the first place the property market wouldn’t be in such a state pushing poor FTB’s into oblivion. You will hopefully now have to suffer so many more can benefit and gain a roof over their heads without a lifetime of debt slavery. I'm sorry but that's life and what happens in cyclical markets. DYOR.

Lizzy

Your payments are £378.60 more than when you started at 5.15% so if you times that by 18 months (the remainder of your term) it is £6814.80, almost the same as your redemption penalty. It is unlikely that you or anyone will get another rate of 5.15% again (for a while at least) You may get a 6.50% or 7%.
Ask a broker on here to work some figures out for you. If you redeem early you will add to your mortgage but it may or may not reduce the payments. That is the most important thing affordability.

If you could be sure that Kensington would not increase further it could be worth holding out but I really think they will go higher.

If you have not called them, give them a ring about a fixed rate now that you have come out of the discounted rate. You may still need to pay the redemption penalty. Thats a starting point, but do shop around.

Griptool

Lizzy wrote: »

Ask a broker on here to work some figures out for you. If you redeem early you will add to your mortgage but it may or may not reduce the payments. That is the most important thing affordability.

Thats a great idea Lizzy, I cant afford the debt I have at the moment so I'd better borrow some more:T

van22663

Yes Crash Gordon, I did realize that it was not aimed at me, my reply was not aimed at you either.

I have taken all of your advice on board and once again many thanks.

mountainchrisriver

Having read this thread I would like to point out to some posters (you know who you are! ) the bit about forum etiquette to be found on the right of the screen:

"Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps."

Stargazer_Lily

Griptool wrote: »

Thats a great idea Lizzy, I cant afford the debt I have at the moment so I'd better borrow some more:T

Normally I'd agree with you about the increasing the amount of debt you owe to get out of a sticky situation, but Lizzy does have a point - at the minute the OP cannot afford the amount of debt at the interest rate she has right now.

If she can get onto a rate she can afford which means she can keep the house and make the payments then this is an option worth considering, even if it means extending the length of the mortgage and amount of debt. In the long run she may well end up paying less for a bigger mortgage over a longer period than paying the massive Kingston rates.

Please note I said considering. Given the amount of outstanding mortgage and the adverse history she has, remortgaging at a rate which would be beneficial may be impossible. Taking a look at what options the OP actually has, however, hurts no-one.

Lil

dunstonh

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.

I think you will find that it was Conrad that was talking about putting a complaint in. My comment was in response to that.

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.

Interest rates do look like there could be a small decrease. However, that wont have much impact on the OP because its a sub-prime mortgage and the credit squeeze if the problem here.

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.

Most think the next direction is a downwards drop not upwards. However, as said above, its not going to impact the OP.

Delaying the inevitable could make the situation worse. Especially if property values drop (as they have in the US and we have mirrored them so far, albeit a year or two behind).

Lets look at situation as we know it.

1 - payments have increased and are unlikely to go down by much and could still go up.
2 - the mortgage is interest only. At some point, the payments are going to have to go up again to switch to repayment and that could nearly double the payment. The OP cannot afford that and the longer it is left, the harder it will become.
3 - property price growth is slowing down and going backwards in some places. You cannot rely on the growth of the last 10 years being repeated in the next 10.

Whichever way you look at this, the property is going to have to be sold at some point because there is no hope of a repayment mortgage being effected.

Do you sell it now and get out before debt cripples you and the decision is made for or do you hang on and try to put off the inevitable?

Sapphire

mountainchrisriver wrote: »

Having read this thread I would like to point out to some posters (you know who you are! ) the bit about forum etiquette to be found on the right of the screen:

"Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps."

I've read all the responses in this thread. I don't think that disagreeing with someone's actions and saying so directly constitutes lack of 'courtesy'.

I also don't think it's up to you to try and dictate to other posters. It would be more helpful if you could offer some useful advice (although Dunstonh has really said it all). :cool:

Frankandann

I received a letter from Kensington on the 20th Sept (dated 30th August) stating my mortgage interest would be going up to 10.8% the following week.I checked my mortgage agreement which said that the rate would be LIBOR plus a minimum of 1% to a maximum of 3%. I wrote straightaway as always suggested by financial experts as the rise of £40 or so a month has left me teetering on the edge (I am 60 and unemployed so remortgaging is not really an option at present). My argument was that the increased rate would fix LIBOR at 7.8% which even given current circumstances seems high.I asked Kensington about the possibility of reducing my interest rate given my change of circumstances since taking out the mortgage (25k in debt then now no debt outside mortgage). Their reply was straight to the point.
a) Our rates are 'loosely LIBOR' based and are in fact on Kensington Variable Rate. Charge what we like in other words (mine)
b) You knew this when you signed the original agreement. Found it after a search through the smallest of small print. Plus the fact nobody explained to me what' LIBOR rate ' was when I took it out in a financial panic four years ago.
c) We cannot change your interest rate as this is what you agreed to. We can't offer you finacial advice but you can re-mortgage elsewhere without an early edemption penalty-not feasible as explained above, and to Kensington in my letter.
I now have no option but to sell-up and rent. Kensington are leeches and their kind will create in this country what has happened in USA.Mass re-possessions of vulnerable people who can't afford their ludicrous rises, and are not offered help by people who were swift to offer it in the first place, obviously with an ulterior motive.

Conrad

anticlaus105 wrote: »

Hang on! What’s the complaint again? I have signed many a loan/mortgage application in my time. Before doing so however I bothered to work out if I would be able to afford it, whatever the circumstances were to change to. If I was unable to I would accept the resultant outcome. Is it you now expect the OP to blame someone else? Is the oh dear someone has crashed into me at 2mph, I must now sue for whiplash brigade at work here?

OP, Please take responsibility for your own actions with this no matter how painful. You took the loan in good faith. If you can’t pay then hand the keys back. Someone who can pay will pick it up later. If you hadn’t paid an over inflated price in the first place the property market wouldn’t be in such a state pushing poor FTB’s into oblivion. You will hopefully now have to suffer so many more can benefit and gain a roof over their heads without a lifetime of debt slavery. I'm sorry but that's life and what happens in cyclical markets. DYOR.

Ok I of course agree the OP has a responsibility here but that does not mean the 'adviser' can discharge poor advice.

The FSA clearly rule that 'advisers must recommend the most suitable course of action even if that means turning the client away'.
Furthermore advisers have a 'duty of care' to impart advise that is suiotable gievn ALL OF THE CLIENTS CIRCUMSTANCES.

I am getting more and more calls form people wanting me to help them get redress, and put all these thicky slick salesmen brokers out of business for good.