mortgage rip off


J

Jledi

we are in the process of signing up for a mortgage that we have no option but
to take, firstly we have had some debt problems and secondly we are buying our
house on a right to buy purchase, also it is a m5 steel framed construction,
because of all these problems the best mortgage deal we can get is 10.75 and
beleive me we have tried to get a better deal over the last 16 months but
nobody wants to know, i suppose when we have cleared all the debt which will be
just after we get the mortgage then we will be in a better position in three
years or so to either move or re-mortgage to a much better rate.
 
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R

Ronald Raygun

Jledi said:
we are in the process of signing up for a mortgage that we have no option
but to take, firstly we have had some debt problems and secondly we are
buying our house on a right to buy purchase, also it is a m5 steel framed
construction, because of all these problems the best mortgage deal we can
get is 10.75 and beleive me we have tried to get a better deal over the
last 16 months but nobody wants to know, i suppose when we have cleared
all the debt which will be just after we get the mortgage then we will be
in a better position in three years or so to either move or re-mortgage to
a much better rate.
What's "m5 steel framed construction" and why is it problematic? And
if it is problematic, are you sure you want to buy? Why not remain a
tenant until you sort out your debts?
 
J

Jledi

Jledi said:
What's "m5 steel framed construction" and why is it problematic? And
if it is problematic, are you sure you want to buy? Why not remain a
tenant until you sort out your debts?


from jledi, m5 steel framed construction is a non standard construction, and
we need to buy now because i'm 42 years old and we are getting the council
house with a 47% reduction. it's now worth £60000 but we are buying it for
£20000, it was valued by the council 18 months ago at £38000 so we are getting
a good deal, just not from the mortgage company
 
R

Ronald Raygun

Jledi said:
m5 steel framed construction is a non standard construction, and
we need to buy now because i'm 42 years old and we are getting the council
house with a 47% reduction. it's now worth £60000 but we are buying it for
£20000, it was valued by the council 18 months ago at £38000 so we are
getting a good deal, just not from the mortgage company
The lender appears to be unkeen to lend (at decent rates) for two
reasons, one being your tainted credit, the other the non-standard
construction. If they view the non-standard construction as dodgy,
then so will all lenders in the future, which means that if ever
you want to re-sell, you may have difficulty doing so, because other
buyers will have the same trouble then as you now. Even if their
credit is better, there's still the "dodgy" construction in the way
of them getting a good-deal loan.

Therefore I would caution against the possibility that you may be
deluding yourself about it really being worth £60k.

Also, what has your age to do with it? Does the council deal expire
on your next birthday? Or is it a macho thing that you think if you
don't own you own pad by a certain age you deem yourself a failure?

How much is your rent and how does it compare to the mortgage payments?
 
J

Jledi

Jledi said:
The lender appears to be unkeen to lend (at decent rates) for two
reasons, one being your tainted credit, the other the non-standard
construction. If they view the non-standard construction as dodgy,
then so will all lenders in the future, which means that if ever
you want to re-sell, you may have difficulty doing so, because other
buyers will have the same trouble then as you now. Even if their
credit is better, there's still the "dodgy" construction in the way
of them getting a good-deal loan.

Therefore I would caution against the possibility that you may be
deluding yourself about it really being worth £60k.

Also, what has your age to do with it? Does the council deal expire
on your next birthday? Or is it a macho thing that you think if you
don't own you own pad by a certain age you deem yourself a failure?

How much is your rent and how does it compare to the mortgage payments?


from jledi, most people get their mortgage for these properties with the
halifax, however because of our credit problems we couldn't, there are 7
properties in our square and 4 of them are bought, there are quite a lot
bought up and down the street, a two bedroomed 100 yards up the street sold 3
months ago for £60000 and ours is a three bedroomed house. as far as my age
goes, we want to buy the property over 25 years now if i'm 42 now and didn't do
it now i would be well passed retiement age by the time the mortgage was paid.
we are getting extra money to pay off all our debts, so instead of just getting
£20000 we are infact getting £37000 but this includes their fees of £1500 and
it is costing us £355 per month, however all our debts will be clear so we
don't have to pay them any more out of our wages. our monthly rent at the
moment is £215, so we will be slightly better off and clear of debt apart from
the mortgage of course.
 
R

Ronald Raygun

Jledi said:
most people get their mortgage for these properties with the
halifax, however because of our credit problems we couldn't, there are 7
properties in our square and 4 of them are bought, there are quite a lot
bought up and down the street, a two bedroomed 100 yards up the street
sold 3 months ago for £60000 and ours is a three bedroomed house.
Fair enough.
as far
as my age goes, we want to buy the property over 25 years now if i'm 42
now and didn't do it now i would be well passed retiement age by the time
the mortgage was paid.
That's not generally a problem. People get mortgage loans even when they're
already retired. So long as they can afford at least the interest payments,
lenders aren't much bothered.

But you have a better reason than age to go for it as soon as possible,
namely the other debts, which it's best to clear as soon as possible.
we are getting extra money to pay off all our
debts, so instead of just getting £20000 we are infact getting £37000 but
this includes their fees of £1500 and it is costing us £355 per month,
however all our debts will be clear so we don't have to pay them any more
out of our wages. our monthly rent at the moment is £215, so we will be
slightly better off and clear of debt apart from the mortgage of course.
Understood. Your credit record will take a few years to recover, so
you'll probably be stuck on the "rip-off" interest rate for a bit (at
least 3 years, I'd guess). But after that, you should be able to
remortgage back to a more reasonable rate (with Halifax?), which will
either mean your payments will go down, or, better still, you should
keep them as high as possible, commensurate with what you can afford,
so that the loan will be paid off faster.
 
D

Doug Ramage

Ronald Raygun said:
Fair enough.


That's not generally a problem. People get mortgage loans even when they're
already retired. So long as they can afford at least the interest payments,
lenders aren't much bothered.

But you have a better reason than age to go for it as soon as possible,
namely the other debts, which it's best to clear as soon as possible.


Understood. Your credit record will take a few years to recover, so
you'll probably be stuck on the "rip-off" interest rate for a bit (at
least 3 years, I'd guess). But after that, you should be able to
remortgage back to a more reasonable rate (with Halifax?), which will
either mean your payments will go down, or, better still, you should
keep them as high as possible, commensurate with what you can afford,
so that the loan will be paid off faster.
Most (all?) credit repair mortgages have early redemption penalties -
usually 3 years. The lender(s) want to maximise their profit.
 
R

Ronald Raygun

Doug said:
Most (all?) credit repair mortgages have early redemption penalties -
usually 3 years. The lender(s) want to maximise their profit.
Well, that's OK then, if the penalty period roughly matches the
period over the course of which the credit repairs itself.
 
D

Doug Ramage

Ronald Raygun said:
Well, that's OK then, if the penalty period roughly matches the
period over the course of which the credit repairs itself.
Also, IIRC, RTB mortgages usually have a 3 year lock-in for maximum
discount?
 
T

Timothy Lee

Jledi said:
halifax, however because of our credit problems we couldn't, there are 7
properties in our square and 4 of them are bought, there are quite a lot
bought up and down the street, a two bedroomed 100 yards up the street sold 3
months ago for £60000 and ours is a three bedroomed house
I'm surprised about Halifax being up for steel buildings, with it being
a house presumably it is two storey which will make it more awkward from
a defective building point of view. Once you have bought it could you
brick it, and if so how much would it be worth once it was a more or
less conventional and much more saleable house?

Make sure you have as short a tie in as you can get with the expensive
lender so that you can change to a better rate as soon as possible
 
J

Jledi

from jledi, most people get their mortgage for these properties with the
I'm surprised about Halifax being up for steel buildings, with it being
a house presumably it is two storey which will make it more awkward from
a defective building point of view. Once you have bought it could you
brick it, and if so how much would it be worth once it was a more or
less conventional and much more saleable house?

Make sure you have as short a tie in as you can get with the expensive
lender so that you can change to a better rate as soon as possible

--
Timothy Lee http://www.wightproperty.com
tlatwightpropertydotcom

from jledi, there is another posibility
the councillor has told us we need to buy it because there is a strong
possiblity that they will be getting knocked down in the next 4 years, they are
discussing it at the moment, they are going to build new houses starting at
£47000 for a two bedroomed, we will be offered either full market value, or a
straight swap in to the new house that he assures me will double in value
within two years because they are not to rent, these new house will only be
built to sell.
 
J

John Bishop

Also, IIRC, RTB mortgages usually have a 3 year lock-in for maximum
discount?
It's nothing to do with the mortgage lender. The council will put in a legal
clause that you have to repay the discount, on a sliding scale, up to five
years from purchase. this is what happened when my mother bought her hosue
many years ago. This stops instant profiteering.

You also used to be able to lock in the offer price by paying a small annual
fee. Ours was valid for two or three years I think, then we paid £100 to
extend it for two more years. We then bought it. good value with 60%
discount, a London house for £18.5k !!

John
 
D

Doug Ramage

John Bishop said:
It's nothing to do with the mortgage lender. The council will put in a legal
clause that you have to repay the discount, on a sliding scale, up to five
years from purchase. this is what happened when my mother bought her hosue
many years ago. This stops instant profiteering.

You also used to be able to lock in the offer price by paying a small annual
fee. Ours was valid for two or three years I think, then we paid £100 to
extend it for two more years. We then bought it. good value with 60%
discount, a London house for £18.5k !!

John
I was referring to the councils rather than the lenders.
 
D

Daytona

D

Doug Ramage

john boyle said:
Are you sure?

It's a few years since I did an RTB, but, IIRC, the council did usually
insert such a clause.

Are you saying that's no longer the case, John?
 
R

Ronald Raygun

Doug said:
It's a few years since I did an RTB, but, IIRC, the council did usually
insert such a clause.

Are you saying that's no longer the case, John?
Surely the council's interest is to forbid a sale within a certain
number of years (or demand part-return of the discount). But they
surely have no interest in locking the purchaser into a particular
lender. Why should they be prevented from remortgaging during the
sale moratorium period?

This is what you appear to have suggested above.
 
D

Doug Ramage

Ronald Raygun said:
Surely the council's interest is to forbid a sale within a certain
number of years (or demand part-return of the discount). But they
surely have no interest in locking the purchaser into a particular
lender. Why should they be prevented from remortgaging during the
sale moratorium period?

This is what you appear to have suggested above.
Ah, that's because the word "mortgages" inserted itself without my
intervention. :)
 
R

Ronald Raygun

Doug said:
Ah, that's because the word "mortgages" inserted itself without my
intervention. :)
I know, I know. The heat. May I recommend a holiday in Alaska?
 
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