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Advice if possible

Discussion in 'Money Matters' started by ross mastin, Oct 15, 2016.

  1. ross mastin
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    ross mastin Active Member

    Hi everyone
    When I changed to the one account for my mortgage they asked how I would repay my mortgage?
    I replied that with the mortgage only being 50% of the value of the house that would cover the repayment one day nd the seller agreed.
    Several years on and they keep asking how I will repay saying my original idea is not a credible way of paying a mortgage offer
    Was i miss sold ?
  2. Maharg
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    Maharg Well-Known Member

    Seems to me that you effectively told them you can pay off the mortgage because the cost of the house will cover it. So you told them you will sell the house to pay it off if you don't have the money.

    One Account is brilliant. I had one and wish I still did but it passed to my ex wife when I got divorced and they aren't available any more.

    Just tell them how you are going to pay it off. Because you have to pay it somehow.
  3. ross mastin
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    ross mastin Active Member

    Yep love the account but from digging deeper it looks like saying "I will sell my house" isn't a credible option
    And now they are saying I said I will use a taxable pension to pay back ? I never said that I think I might need to contact the ombudsman.
  4. Maharg
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    Maharg Well-Known Member

    You must have some way of paying off your mortgage, surely.
  5. bigmac
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    bigmac Well-Known Member Trusted Member

    pension mortgages were all the rage 30 years ago--but quickly became a dirty word--as indeed so did most private pension plans.

    there must be many 1000's of interest only mortgages. maybe the mortgage company is getting cold feet.
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  6. ross mastin
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    ross mastin Active Member

    From day one I told them the equity in the house was far more than the mortgage
    And they excepted that but I've read up and that's classed as not being a credible way of paying the off.
  7. bigmac
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    bigmac Well-Known Member Trusted Member

    over the last 30 + years ive had 5 mortgages--with 5 different mortgage companies. all were interest only--i never paid anything off the capital--just repaid when i sold. the most i ever borrowed was 40 grand.
  8. ross mastin
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    ross mastin Active Member

    The problem here is They are now asking how I will pay it off and me saying I can sell the house is not acceptable although they said yes in the first place, it doesn't realy affect me but it feels they should of not sold this mortgage on these terms
  9. bigmac
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    bigmac Well-Known Member Trusted Member

    so--ask them what they want--and if it doesnt suit you--tell them you will take your business elsewhere.
  10. Bluebirdjones
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    Bluebirdjones Member

    From what you've so far stated, these's been no "mis-selling".
    You've got no case.
    Can't really remember the full terms of the OneAccount scheme, but I guess you effectively took out an interest-only mortgages,(or you make minimal payments off the principal) which many people did years ago.


    Then, there was no regulatory requirement for the mortgage company to know how you would repay the principal.
    (Perhaps they should have done some due diligence on their own behalf.... but that was for their benefit.)
    Now, there's an obligation on them to make you aware that this principal has to be paid back (obviously !), and to "tick" their boxes, they require you to give them an answer.

    You could say, for example, "I intend downsizing a few years before mortgage maturity, and using the sale proceeds to repay the original mortgage"
    or
    "My pension pot is £xxx, and at the appropriate time I intend withdrawing a lump sum equivalent to the mortgage amount, and subsequently repaying the outstanding mortgage.

    -
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  11. ross mastin
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    ross mastin Active Member

    But would they need to know you can pay it back ? Giving a mortgage based on a value of a property is not credible as that value could obviously go down, they might not need to know how your going to pay but more importantly they need to know you can pay ?
  12. Bluebirdjones
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    Bluebirdjones Member

    "Giving a mortgage based on a value of a property is not credible "
    Almost all mortgages are based on the value of the property.
    Mortgages are based on the LTV ..... loan-to-value.
    I guess when you took out the mortgage, all they were interested in was if the LTV was low enough for them to get their money back (if they had to foreclosure), and if you could service the monthly repayments.
    Obviously both of these requirements were passed, and hence you got the mortgage.

    eg.... you want to buy a house.
    It's worth £100,000 and you have a cash deposit of £30,000.
    So they lend you £70,000 (LTV = 70.00%) on an interest-only mortgage for 25 years.

    If you don't keep up the payments, then they foreclose on you. As long as they sell the house for greater than £70,000, then they're happy. All they're interested in is getting their money back.
    (So the lower the LTV, the happier the mortgage company is to lend you the money) .

    If you keep up with the payments for the 25 years, all great.
    BUT that's when the mortgage deal ends. All you've done is service the interest.... not the principal.
    You now have to re-pay them the £70,000 you initially borrowed.

    So, as you say....... "they need to know you can pay"......
    ..... because they'll want that money back.

    Their correspondence is more about, if you can't pay, or haven't thought about how you're gonna pay, talk to us now, and let's explore some options.
  13. ross mastin
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    ross mastin Active Member

  14. ross mastin
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    ross mastin Active Member

    Giving a mortgage based on the repayment vehicle based on the value of your property is what I meant.

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