Re-mortgage application forms query?

[mgfboy]

Re: Re-mortgage application forms query?

A letter update received today, dated 21 May 2012.


Dear Mr & Mrs *****

Mortgage Account ************

I am sorry that it is taking so long to provide you with our position regarding the mortgage. I am hoping we will be able to respond regarding this within the next 10 days.

If you have any questions, I will be very pleased if you could call me personally on Tel ***** ******

Yours sincerely

Executive Team.

I wonder what they mean by our position regarding the mortgage????

[di30]

Re: Re-mortgage application forms query?

I wonder what they mean by our position regarding the mortgage????

I am unsure of that as well to be honest

[di30]

Re: Re-mortgage application forms query?

You got me thinking now, what can this mean I wonder , why "their position" or maybe it's not exactly worded correctly.

[mgfboy]

Re: Re-mortgage application forms query?

I just hope that they dont decide because they got the income details incorrect to try and pull the mortgage on the basis that the initial disclosure was incorrect.

Sometimes opening cans of worms isn't a good thing

[di30]

Re: Re-mortgage application forms query?

Letter arrived today, not sure what to think though, I've yet to show hubby for when he gets in from work. (I did not have a clue what they were going to do prior to this, I did not mention about any write off's anyway) lol. Please let me know what you think, please and thank you.

Dear Mr & Mrs

Mortgage Acc Number *********

I refer to my letter dated 21 May 2012 and previous letter of 26 April 2012.

In my letter of 26 April 2012, I did explain the concerns that we had with the lending that had been provided to you.

Whilst we knowledge there are some concerns with your application we also have to consider that you did receive the full amount of £117,000 that we provided. This enabled you to repay your lending with (Previous mortgage provider), and the repay of the legal charge that was present on your property. We therefore did not increase your overall level of debt.

With this in mind we would not look to "write off" any of the mortgage lending,but see how we can make this more affordable for you. Using the information that you provided to show your income was in 2007, we have calculated that the actual amount of lending that we could have provided, would have been in the region of £54,000.

We therefore propose the following:

At present your mortgage balance is £112,038.73, and this amount of £28.48 relates to sub account 99, the fees and charges account, that I will come to this shortly.

Therefore looking at your actual borrowing amount which is noted under sub account 01, the balance is £112.010.25. We intend to split this amount leaving £54,000 as the amount on which you are required to make payments.

The remaining £58,010.25 will be transferred to a newly created sub account and we will not charge you any interest on this amount or expect you to make payments to this. You will however be expected to repay this amount at the end of the term. You then have several options open to you.

The balance of £58010.25 can remain as it stands until the end of the term, which is currently 20 years and 3 months. You can either to repay this amount as a lump sum at the end of the term or if you wish you can make payments to this amount to reduce the balance owing over the term.

The amounts paid however will be down to you. Our payment assistance line can if you wish review your income and expenditure to see what they feel would be an affordable payment and you can contact them by ringing our Customer Services team on ***** ******.
Alternatively as I have said you can make the payments you want to.

Obviously I must point out that if you make the decision not to make any payments to this amount over the remaining term, come 20 years from now, if the mortgage is still with us, you will be required to pay this amount in full.

If you decide to change lender or sell the property, we would expect that the £58,010.25 to be repaid at that time.

Going back to the amount that would remain on sub account of 01 of £54,000, the revised payments to this element of the lending would be approximately £284.

Sub account 99 currently has a balance of £28.48 and I intend to make payment to clear this so that you have a clear start with the balances owed.

In addition to this, I did mention that I would look into the fact that you raised these concerns with us before, yet we did not review this, I am sorry that we did not review this initially and in recognition of any distress and inconvenience this has caused you, I am also offering you a payment of £500.

Given the nature of your concerns and the offer made, we would strongly recommend that you seek independent financial advice. If you decide to accept the offer made without pursuing this action, that decision is yours.

I enclose an acceptance slip for your use and would ask that if you are happy with the offer made, that you sign and return this and I can arrange for the adjustments to be made and the payment issued.

If you remain unhappy, you have the option to contact the Financial Ombudsman Service, so long as you do so within six months of this letter. I've enclosed a leaflet providing contact details and information of their service.

If you have questions about my offer, I will be very pleased if you call me personally on ***** ******.
I will be aware from office from 25 May returning 6 June 2012.

Yours sincerely

Exectutive Team.

[IF]

Re: Re-mortgage application forms query?

Wish I could help Di but haven't a scooby me

Someone will know what to do matey

[mgfboy]

Re: Re-mortgage application forms query?

Well that looks a bit of a result, I've never seen anything like that, in effect they are giving you a 20 year interest free loan on over £50K !!!!

This has to be one of the deals of the century ( as long as they don't show any adverse )

It's a great result

[Never-In-Doubt]

Re: Re-mortgage application forms query?

Well done di. 20yrs interest free on around £50,000

Nice one haha

[IF]

Re: Re-mortgage application forms query?

You see Di, your day has got a whole lot better!!

[Never-In-Doubt]

Re: Re-mortgage application forms query?

Plus a £500 payment to boot

[Undercover Elsa]

Re: Re-mortgage application forms query?

Hi Di,
Just looking at that letter and working with some very rounded figures, the interest you'll be paying on the £54000 over the 20 year period is around £14000.
I guess the interest you would have had to pay on the other £58000 would therefore be in the region of £15K + - so that is a big saving for you.

So...to make payments towards it or not? (and this is just my take on it )
If it was me I wouldn't make payments directly to them. Ok you're not paying interest, but you wouldn't be receiving any interest from the money either. Its dead money that won't grow.

What I would do is make payments into the best value savings account, ISA or whatever that I could find.
That way your money will grow over the next 20 years, while at the same time the spending power of that £58K will be shrinking. So keep buiding on the savings, but even if you save enough before the 20 years is up, don't pay the £58K off till the end of term so that YOU are getting the interest, not them. Simples.

Shep x

[Undercover Elsa]

Re: Re-mortgage application forms query?

Another (naughty) thought has just popped into my head though...
If they concede the misselling to the point of making this offer, and have wiped the interest from the amount missold (£58K) from hereonin, does it not follow that they should also refund the interest you've already paid upon the £58K from 2007 to now?

[Never-In-Doubt]

Re: Re-mortgage application forms query?

As this is interest free, you know what I would do?

Not save for it. Literally pump everything into the interest bearing loan to pay it off asap then start to save for the other half of interest free element. I assume you have 20 years left so something like this....

0 - 10 years - repay the interest element instead of taking 20 years, so double your payments and in the meantime just ignore the 'interest free' portion.

11 years - you will then have settled the interest part leaving just the interest free part - so you now have 10 years to save the same as you just paid off, however instead of putting £500+ per month into the mortgage pay it into a high interest account for the full ten years and then once you get the £58k, repay it off - should take around 8 years if you do it right

Make sense?

so from now on you literally pay as much as you can into the interest part - do not save for the other half as the interest on the other part will be higher than savings rrates so clear this asap.

Then once that's paid, start saving for the interest free part - just remember, if you were paying say £700 p/m for 20 years to clear the whole thing, you now pay £700 p/m into the interest part of the loan for half that time (ie only 10 years) which leaves you 10 years to repay the interest free part of the loan.

Simples, no...?

[mgfboy]

Re: Re-mortgage application forms query?

Another (naughty) thought has just popped into my head though...
If they concede the misselling to the point of making this offer, and have wiped the interest from the amount missold (£58K) from hereonin, does it not follow that they should also refund the interest you've already paid upon the £58K from 2007 to now?

A very interesting thought that, but the offer seems fair considering Di didn't set off to prove misselling of the mortgage and it could have so easily gone off in a much more horrible direction!!!!

It all depends on the risks your willing to take

If you keep the situation as is, I would normally tell a client to pay off what has the highest interest rate first and ski down the debt book from there.

[Undercover Elsa]

Re: Re-mortgage application forms query?

LOL aye..good point...same principle..I suppose it's down to what the loan interest rate is compared to what savings rates are available. Eg my mortgage is 0.5% above base rate so if I was in same situation wouldn't I be better off with a 4% ISA?