My lender wants rid of me !

gforster

Hi guys,

My lender wrote to me this morning asking politely if I would take my business elsewhere....

I was made bankrupt a few years ago and was discharged in November 2005, despite that I had no arrears, CCJ's etc etc. I got my mortgage almost exactly one year ago with a 3 year fixed rate of 6.74%. The house is worth £145,000 and has almost exactly 15% equity.

They have basically said that due to a restructuring of their lending criteria they "offering" me a deal whereby if I can find a better deal they will wave ALL early repayment charges. I can basically walk away for free in order to get me off their books.

Firstly I am guessing that they cannot FORCE me to give up my mortgage providing I pay on time ?
Secondly is it worth me trying to find a better deal or is it simply that there isn't one out there for me ?

I am in full time employment £30k and my wife parttime on £15k (NOT pro rata).

setmefree2

Thanks for that. I have no advise but that is really interesting...Good Luck. I'm sure they can't take your mortgage away. Hold tight.:money:

maninthestreet

Someone posted recently on here about their Mortgage T+C's, where it stated that the lender could demand repayment of the entire mortgage debt, as long as they gave the borrower 3 months notice, regardless of whether the mortgage was in arrears or not. You should check your mortage T+C's to see if something similar also applies in your case. Meanwhile, see what other mortgage lenders are prepared to offer you. If you can get a better deal
elswhere, and pay no early repayment charges, then take it.

gforster

That is a little worrying I will have to read them !

They are not currently suggesting anything like that and have written like an offer giving me until July 2008 before the "offer" expires. Just wanted to check really whether that was even legal....

I am definately going to go and see a financial advisor to see if they can offer a better deal but looking at some of the other threads on here it looks unlikely.

loveandlight

It is only an option they are offering you, so if you are happy with your present mortgage deal, then I would just ignore the letter and carry on as you are. They can't call in the mortgage as you are not in breach of any of its terms and are paying on time (I presume).

It is unlikely you will be able to better it elsewhere anyway, as a lot of properties are being downvalued by new lenders nowadays so you may qualify but your property may not. Also a lot of the attractive mortgages are now being withdrawn from the market.

UPDATE:
I have read the earlier message about some lender having the power to call in the entire mortgage on demand. I think this is highly, highly unlikely, otherwise all lenders would be putting that clause into their mortgage agreements. The courts wouldn't be happy enforcing that agreement either if the borrower was not in breach of the mortgage and had always paid on time etc. I am sure a mortgage adviser will be along to offer their advice. There are some good ones on here.

gforster

Yes I thought that might be the case. We are of course not in breach of any T&C's and have paid everything on time etc etc.

I am relatively happy to be honest with the mortgage, it's just that the redemption penalty is around £7k so when you are told that has been temporarily removed then you think maybe you can take advantage of it, also I would rather be with a company that actually valued my business rather than one that sees me as a liability.

Part of the problem is that when I got the mortgage I self certed (self employed) as well as the bankruptcy etc. Since then things have changed dramatically but they will not have a record of this.

cells

6.74% :eek: :eek: :eek:


you can get 5 year fixes at under 5.5% which will reduce your mortgage massively!

your current mortgage of £700PM will go down to £560PM

if both of you have terrible credit ratings and or not enough earning to get a mortgage for the 120-125k you need perhaps a parent can do it for you?

gforster

Thats kind of what we were hoping to do, theres only me with a bad credit rating (and it was only the Bankruptcy) my wife is spotless and I think our multiples add up (more so than when I selfcerted).

I would love to be able to save £140 but in the current climate I didn't know if we would stand a chance ?

cells

gforster wrote: »

Thats kind of what we were hoping to do, theres only me with a bad credit rating (and it was only the Bankruptcy) my wife is spotless and I think our multiples add up (more so than when I selfcerted).

I would love to be able to save £140 but in the current climate I didn't know if we would stand a chance ?

you can give it a try, might work since your join income is good for the 120k you owe

alternatively if you or your wifes parents have good credit histories and scores then it may be possible

sell the house to them, they can get a 5 year mortgage.

5 year fixed rate offset Mortgage

5.29% for 5 years
£600 Fee

on an IO for 120K that would be £530PM

but where ever you do, dont default or they will go after the folks :P

gforster

cells wrote: »

you can give it a try, might work since your join income is good for the 120k you owe

alternatively if you or your wifes parents have good credit histories and scores then it may be possible

sell the house to them, they can get a 5 year mortgage.

5 year fixed rate offset Mortgage

5.29% for 5 years
£600 Fee

on an IO for 120K that would be £530PM

but where ever you do, dont default or they will go after the folks :P

It is clear to me from your comments... that you haven't met my mother in law !!!

Thanks for the advice everyone, I think I will see the FA and see what they say I haven't got anything to lose only possibilities to save money.

If nothing else it hopefully has provided some of the experts on here with some information they may not otherwise have known as I can't be an isolated case so perhaps this is going to happen a bit more ?!

Conrad

You say you have 15% equity but this is almost certainly not how the lender see's it.

Prices are falling which is why accross the board lenders are reducing maximum LTV's, some to just 75% (Wave did this today).

This means all of sudden sub prime lenders are under pressure from thier Bankers, insurers and invstors to get mortgages off thier books where the LTV's are getting uncomfortable. In reality they will deem your borrowing is at about 100% ltv because there are so many forced sellers that prices in such circumstances tend to go lower and then there's closing costs, balif costs, court costs and so on so its easy to see why such lenders get nervous - they are worried about getting the debt repaid in full in the event of a repo.

I do not know if they can enforce a sale, but it would'nt surprise me afterall THEY OWN YOU HOUSE UNTIL THE LIEN IS CLEAREDIts thier asset NOT yours. People often dont realise this.

Good luck