Remortgage Hell With Financial Advisor

Dan_Collins_2

geniejj wrote: »

Dont like to be the bearer of bad news but also agree with leon.

Had a quick chat with our subprime specialist and the upshot was

Your are likely to need a 120K min val for 89K - max is going to be 75% with your arrears

If you have not made any payments in the last 3 months you will need to make 3 clear before getting a deal.

If L&C do find a mortgage lender prepared to do this please post on the board as I an trying to place some clients at the mo in similar circumstances.

I think the advice of talking to GMAC first is very good advice.

Good post, that market is going to be tough for most of next year, bad timing I am afraid!

trulysaintly

Dan_Collins wrote: »

Good post, that market is going to be tough for most of next year, bad timing I am afraid!

Quite agree with the comments made - best to approach existing lender first.

Just one thing though Dan, why is charging an advice fee immoral?

Surely if it is offered to the client as an alternative to the adviser receiving commission - why is this bad?

Agreed, on straightforward cases, fair enough, no fee.

But on more complex ones, admittedly there are concerns if a broker wants to charge a 1% fee upfront, but if you are spending many hours on a case that may not go anywhere, why should you potentially work for nothing??

Conrad

No lender will be able to assist due to the arrears.

A new principle has recently been adopted by lenders which states; 'a remortgage must demonstrably put the client in a better position'.

I'm finding lenders declining unless it as absolutely clear this is so.

Taking your case in particular, any lender will find it impossible to agree you will be in a better position going forward as there is no evidence (categoric evidence proven by recent action) that you wont simply fall into arrears again. Saying you now have a new job wont cut it, afterall the new rate would likely make your payments even higher.

I'm afraid you might have to sell - up.

PS - ON FEES; The best footballers, surgeons, actors and Lawyers charge the most for thier services. I prefer transparent fees to trying to flogg people insurance, afterall the critical illness cover proportion of declined claims is unacceptably high (mainly due to thick sun reading brokers "dont worry about that illness you had as a child, no need to mention that lurv"

Conrad

Dan_Collins wrote: »

L&C will probably find you a mortgage

Is that right Dan?!!!!!!!!!:T

No wonder no one will pay you a fee.

Do you not read the mortgage press?
Are you not aware of the credit crunch?
Are you not aware of the new ethical principle whereby a lender has to be able to justify whether a remortgage is ethical or not (ie will definitely put the client in a better position?)

Ah well:rotfl:

Dan_Collins_2

trulysaintly wrote: »

Quite agree with the comments made - best to approach existing lender first.

Just one thing though Dan, why is charging an advice fee immoral?

Surely if it is offered to the client as an alternative to the adviser receiving commission - why is this bad?

Agreed, on straightforward cases, fair enough, no fee.

But on more complex ones, admittedly there are concerns if a broker wants to charge a 1% fee upfront, but if you are spending many hours on a case that may not go anywhere, why should you potentially work for nothing??

Just winding Conrad up mate (sorry Conrad but its fun and meant in jest). I dont mind fee's depending how much and how they are done. I dont believe you are a better broker for charging a fee or not, its about choice.

Also conrad if Solicitors and Accountants did not charge fees then they would not earn any money, we can earn commission! Football players are paid a salary we, well I, am self employed! I only sell policies when they are needed are wanted and not to make up the numbers, however, the insurance salesmen are still out there and until they die off we will have to live with this stereo type! I like to think I am the new age broker LOL:beer: .

Dan_Collins_2

Conrad wrote: »

Is that right Dan?!!!!!!!!!:T

No wonder no one will pay you a fee.

Do you not read the mortgage press?
Are you not aware of the credit crunch?
Are you not aware of the new ethical principle whereby a lender has to be able to justify whether a remortgage is ethical or not (ie will definitely put the client in a better position?)

Ah well:rotfl:

Read my post again and please dont cut bits out to suit your comments. You probably could get the mortgage but I am not saying she should!

I dont ask for a fee because I dont believe in them, like I say its choice!

dwsjarcmcd

Conrad wrote: »

A new principle has recently been adopted by lenders which states; 'a remortgage must demonstrably put the client in a better position'.

Compared to what? Obviously if you compare to a maturing 2 year fixed rate then you will not be in a better position but if compared to other loans i.e SVR how would the lender know? The customer may not have even aproached their current lender so what would the new lender have to compare this against?

It is the Advisers job to do this if the customer uses one, lenders will use affordabilty as normal

dunstonh

With respect, regardless of what the OP does, it looks like the house is going to be lost sooner or later.

If the OP has managed to get into that degree of trouble on a deal arranged two years ago then even if they could arrange another deal now it is unlikely to be on such favourable terms and if they couldnt manage it before how can they be expected to manage it in future?

I think the logical thing to do is look to sell up and take profits on the equity in the house whilst there is still some to be had. Clear debts and go rent for 12 months or so whilst house prices drop and then investigate whether they are in a position to buy again then.

Best to do it on your own terms before the lender makes the decision for you.

skywalker_20

Hi all, new to this site but after similar advice to the thread starter on behalf of my parents.

Basically, my mum has a mortgage with GMAC which fell into arrears last year/ early this year - 6 months payments. The payments were £1200 on fixed rate.
Eventually after burying head in sand etc she sorted finances. She had arranged to repay arrears at £50 per month on top of mortgage with GMAC but they still took to court to protect themselves (understandably) and an SPO was granted in July this year. Since June all payments and arrears arrangements have been kept perfectly but fixed rate ends on 01/01/08- sending payments up by £170 per month and putting her back in financial difficulty just as she's getting back on track.

Is it possible to arrange a remortgage if you are subject to a possession order (albeit suspended on terms which have not been breached)?

Will GMAC be able to offer a new rate or is this pointless?

Current outstanding amount is around £160k, house value currently around £210k.

The idea will be to reduce monthly payments. Is it worth having a look around or is she best (or has no option but) sticking with the £170 rise.


** further advice - since the £50 p.m arrangement agreed at court for repayment of the arrears, GMAC have been charging a monthly £50 fee for being in arrears, which means nothing is actually coming off them. Is this allowed? Surely that means she entered into an arrangement which (unknowingly) was a waste of time and she will be charged this extra £50 penalty for the rest of the 22years remaining?

Leon_W

Hi Skywalker

I think it will be impossible for your parents to remortgage. As posted above, it's not that brokers (or lenders for that matter) don't want to help, we do, but, as it stands at the moment, there simply aren't the mortgage products out there at the moment to enable it.

Brokers simply don't have the products available that we did just a few short months ago due to the "credit crunch" and this goes for lenders also. They may be willing to lend to credit impaired or "sub prime" borrowers, but if that money is not available on the money markets at a decent rate then their hands are also tied.

It would be easy to turn around now and blame GMAC,but it isn't as simple as that. GMAC borrowed the money 3 years ago in order to lend it to your parents at a fixed rate which unfortunately they fell behind with. They will obviously protect their interest which I think you understand (as your post was quite measured) but can they offer your parents another deal ?? Well they might,but you have to bear in mind that interest rates have risen markedly since your parents took out their fixed rate anyway so the likelyhood of them actually cutting their mortgage payment is practically nill, the increase is inevitable. Also take into consideration that GMAC would have to pay more to borrow the same amount.

I fear they will be hit by increased payments whether they remortgage (unlikely) or not. I'd them to talk to GMAC as the rate they are offered (if they do) is going to be the best they will get.

All the best.