Feel Ripped Off by Mortgage

Redwino222

I know this is not helpful at this stage but never take financial advice from your estate agent. 

Mark_Lion

Redwino222 said:

I know this is not helpful at this stage but never take financial advice from your estate agent. 

This is very good financial advice.

Mark_Lion

This is what happened so far.

I tried to make contact with a RICS valuer, via their website. Sent a message from their Contact page 1 week ago. No reply. Sent email to them a few days ago. No reply.
I know I need a RICS valuation to pay Catalyst. Maybe will look at different RICS valuer.

I bought the house for £175000. Had a valuation from Romans Real Estate. My house valued at £275000.


The mortgage broker I spoke to, he emailed me asking for latest pay slip, and details of mortgage amounts.
I told him my yearly salary and sent a photo of my latest payslip.
My latest payslip was payment including a huge amount of overtime I did. My take home pay was twice the normal pay amount, was paid £3500 after tax. 

Telling the broker my salary, I thought would forecast a loan amount.
He did some calculations using the Romans valuation.
I thought the broker would re mortgage Catalyst and keep Nationwide. 
He wants to combine my Nationwide and Catalyst into 1 mortgage. His method means I will not be able to pay off Catalyst completely. I would still owe Catalyst £20000.
I can not pay £1510 per month when I work a normal month with some regular overtime.
Below is the brokers workings.

• 2 Year Fixed Rate 1.15%
• Mortgage Amount £155,000
• 9 Year Term (maximum that can be done as it takes you to age 70)
• £1,510p/m

I emailed my broker last Friday early morning, to say I can not afford the monthly payment and do not usually get that pay amount.
He has not replied. Maybe he has given up on me. Will see if he replies this week.


So, my thoughts on what to do, I am not sure which is best...

Plan A is if I can only reduce some of Catalyst's share, it will be better when I have to sell the house.

Plan B is do nothing, save money and sell house just before mortgage time ends. Buy smaller with my share of house sale.

Plan C is sell house in 2 to 5 years. Buy a fixer upper. Then sell after refurb. Make profit. Repeat until I can buy a house I want to keep.


P.S.The full term of my current mortgages take me to be 73 years old on completion. I will be getting government and NHS pension. It depends how much I paid into NHS pension, but how will I know if my pension will be enough to pay my mortgage?
I will be willing to work into my retirement years, but don't know about 70+

Swoosh84

Quick google search on NHS pensions lead me to this page:
https://www.totalrewardstatements.nhs.uk/Login/GatewaySignin

Unsure about the NHS, but when i login to my own pension I have a tool which shows my estimated earnings at retirement. You will also be able to take a lump sum of up to 25% of your pension pot. Unsure whats in there just now but this may allow you to pay off a chunk of Catalyst if you are adament you want to stay on in your current home.

MWT

Mark_Lion said:

I thought the broker would re mortgage Catalyst and keep Nationwide. 
He wants to combine my Nationwide and Catalyst into 1 mortgage. His method means I will not be able to pay off Catalyst completely. I would still owe Catalyst £20000.

The Catalyst part isn't a mortgage, they just own part of your house and they charge interest on the loan..

You can't keep the Nationwide mortgage as it is and get another normal residential mortgage as well, it would have to be a 2nd charge mortgage and those are expensive, so the broker was not wrong to be looking at remortgaging to replace the existing Nationwide mortgage to get a higher amount loaned to let you pay off at least part of the Catalyst Equity loan.

... but it sounds like the broker may not have properly understood your annual income so his proposals may not be accurate at the moment...

Redwino222

You need to be completely open with your mortgage broker, they should have a complete financial picture of you income, outgoings and debt.

did you fell the broker That these payslips weren’t representative of your normal income?

Did you do an outgoings assessment?  

The broker can’t help if they don’t understand the full picture 

Mark_Lion

My income has been higher since the virus got control. I have done a lot of overtime throughout the year. Co workers have been off with the virus and one has been sick for most of one year with heart problems.
I got the virus, but I have antibodies, so it did not affect me.

Sorry, I thought the info of my previous yearly income and the hourly pay rate would show my income.
I told him my debts and outgoings.

My February pay slip was £500 more and December/January were higher than normal

If I was good at communicating and understanding finance, I would not be in shared ownership. 

Mark_Lion

Update, been a while since last posted: Briefly, situation in a nutshell... I believe I was falsely sold a Equity mortgage. 

I blame 3 people for my not knowing about my Equity loan. The mortgage broker. The solicitor. Myself.

I applied to Catalyst for what I thought was a NHS low interest mortgage in 2009.

I found the Catalyst application form I sent to Catalyst. I have it in my emails.

I had 4 choices to make for type of loan. I put a cross in 

First Time Buyers’ Initiative

New Build HomeBuy (part buy, part rent).

I am surprized I put a x in the part buy, part rent. Must have been curious on how it worked.

Did not put cross in equity loan, but that is what I was given.

I was getting lots of paperwork from my solicitor, so was reading that and expecting mortgage to be Nationwide and Catalyst low interest NHS workers loan, which is what I asked for.

I recently looked at Martin Lewis web site about mortgages. It said it is the responsibility of the mortgage broker to explain the details of the mortgage to the client.I asked for the "NHS Low Interest Mortgage", which real estate sales staff told me about.

The Jelf broker said to me, "I have a good deal for you." I remember it clearly. 
He got me the Equity mortgage.  He did not tell me details about the mortgage.

He did say, if I sold the house, I would have to pay back the market value to Catalyst. That is the only thing he said about it. Did not say it was interest only, did not say about staircasing procedure, or it was shared ownership.

I should have questioned this statement about market value, and so, I blame myself for not finding out about the equity loan. I planned to stay in the house for longer than the mortgage term.

The mortgage broker also asked me if I wanted PPI on the mortgage, and explained it to me. That gave me some more trust in him. I declined the PPI.

I do not have the full Equity mortgage contract. My solicitor destroyed it.

Since finding out about the equity loan and the large payment I need to make (and probably will not be able to), had real thoughts of suicide.

Used to think, I had my payments going well, future is secure and will stay in the house for many years after final payment. Having that suddenly taken away was huge shock.

Concidered phoning Samaritans, but didn't. My job in the NHS, I see people in serious sickness and they continue to battle on. 

So now I think to myself, I have 9 years to make payment, or pay enough to reduce the damage, so I will try my best.

I feel like I want to complain against the mortgage broker and get some compensation, but think I do not have enough proof, and I take some of the blame.

++++++++++++

I had a RICS valuation on my house over 2 weeks ago. Valued at £240,000. 

Emailed the mortgage broker day after valuation. He has not replied. Emailed him again 1 week ago, no reply.

Maybe he is busy, but I think he should inform me if he needs some time due to workload.

Before the RICS valuation, he was quick to give estimates on how much I could remortgage, and replied to my questions.

Now silence. I would like him to continue, but maybe I should start looking for another broker. 

MWT

Mark_Lion said:

I found the Catalyst application form I sent to Catalyst. I have it in my emails.

I had 4 choices to make for type of loan. I put a cross in 

First Time Buyers’ Initiative

New Build HomeBuy (part buy, part rent).

Could you tell us what the other 3 options were on the form please?

... and do seek some help for the way you are feeling about all of this, you don't have to try and manage this all by yourself and as an NHS worker you do have perhaps a better understanding than most about what help may be available, so do think about making use of what is out there...

Mark_Lion

Thanks for your reply MWT. Will look into NHS stuff.
Below is pasted from the application. I put a x in box beside First Time Buyers’ Initiative and New Build HomeBuy (part buy, part rent). Don't know if PC keyboard has tick, so I put x and left other 2 blank.

For monitoring purposed which scheme(s) are you particularly interested in? (Please tick all that apply or leave blank if unsure at the present time)

MyChoice HomeBuy (equity loan) 

First Time Buyers’ Initiative

New Build HomeBuy (part buy, part rent) 

Discounted Rent

The NHS low interest is not listed. From memory, I think it was a temporary option. Available for a limited time.