Hassled over interest only mortgage

dunstonh

Write to their complaints department explaining what has happened so far and how much it is distressing you.

You have to be a real snowflake to get distressed by a letter asking you how you intend to repay the interest-only mortgage. The only distress you would expect this letter to bring is if you didnt have a repayment strategy and it worries you.

They will have to respond, giving you a timescale, and provide details of how to escalate if you're not happy with the outcome.

As lenders are required to do this, the FOS cannot award against the lender.

They will have to respond, giving you a timescale, and provide details of how to escalate if you're not happy with the outcome.

The FCA do not handle consumer complaint and will just forward the letter to the lender.

In either case you can claim some small compensation for your distress.

Perhaps the compensation should be some cotton wool to help wrap them up.

MSE_Katie

Thrugelmir wrote: »

Has your mortgage changed ownership? As Mortgage Express/Bradford and Bingley ceased to exist some time back.

Hi Blackjack Davy, have you ever tried to switch away from your Bradford and Bingley mortgage? I work in MSE's campaigns team and am looking to speak to B&B mortgage holders (whose loans have now been sold since its collapse), who've tried to switch to a better deal and couldn't. More on this here - https://forums.moneysavingexpert.com/discussion/5872255/bradford-bingley-mortgage-and-tried-to-switch&highlight=bradford+bingle y

enthusiasticsaver

Any responsible mortgage lender should ask how interest only mortgages are to be repaid.

If you have responded telling them how you intend to repay them once already though then I would ignore or go to complaints.

If you have not given a definitive answer then this needs addressing.

sparkey1

They have to because the regulator wants them to. Remember the crash of 2008 when the lenders were all blamed for lending interest only to people that couldn't afford it. Well this is the result of it.

More bank regulation! Reassessments on interest only customers.

The answer not to give them is "We will sell the house" because what if there is a crash or you cant sell.

Tell them , that you will be remortgaging to a different lender before then, or that you have a payment vehicle in place. Do you? What is it? Pension? ISAs etc

ladybabe

i don't know if you are aware but new regulations came into place about 4 years ago about interest only mortgages meaning most lenders have to contact you at least yearly to check you repayment plans meets their lending requirements still. so if your repayment plan is not something they now take or you don't respond then they have the right to keep reminding you to review your repayment options

heston2014

Funnily enough I came across B&G 'part and part' which is essentially interest only to part repayment option, perhaps they're trying to get you to look into this with all of the reminders, except their automated emails have not been updated to reflect content lol?

http://www.bbg.co.uk/landlords/manage-your-mortgage/switching-to-a-repayment-mortgage

On a more serious note, how easy is it to switch to repayment at the end of fixed term? (just to add ours will be Let to buy / open deck access i.e. limited lenders!)

silvercar

The answer not to give them is "We will sell the house" because what if there is a crash or you cant sell.

You would have to be really unlucky for your home to be worth less than it was worth 25 years ago!

I suspect the reason lenders don't like the answer is that it doesn't explain where you will live.

silvercar

On a more serious note, how easy is it to switch to repayment at the end of fixed term? (just to add ours will be Let to buy / open deck access i.e. limited lenders!)

Is the 'let to buy' for a fixed time? If so, the lender could withdraw consent to let and effectively force you to sell or remortgage elsewhere.

If the 'let to buy' is for the full term, then you could remain on their SVR for the foreseeable, or remortgage elsewhere on a standard BTL mortgage. BTL mortgages are more often interest only, so less of an issue, though open deck may well limit options.

heston2014

silvercar wrote: »

Is the 'let to buy' for a fixed time? If so, the lender could withdraw consent to let and effectively force you to sell or remortgage elsewhere.

If the 'let to buy' is for the full term, then you could remain on their SVR for the foreseeable, or remortgage elsewhere on a standard BTL mortgage. BTL mortgages are more often interest only, so less of an issue, though open deck may well limit options.

Thanks for the response.

It’s 2-year fixed although we are waiting for the 5-year option from our broker. As it’s a specialist lender, I’m just nervous about the SVR although we could do a product transfer according to our broker. I’m also conscious of the limited lenders for open deck but we are in London so I’m hoping in a few years time, we’d be able to negotiate a better rate even if we stick with the same lender. I just don’t feel comfortable with the SVR.