Nationwide Mortgages

[Guest Gertie100]

Morning all

 

As expected our mortgage is going to rise by a lot at the end of June.

When we saw the mortgage advisor she told us that if we want to continue with a part repayment and part interest only mortgage the FSA has said that some sort of savings plan must be in place to pay off the interest only part of the mortgage.

 

Now, whilst I'm not the most experienced person in the world, I do read and listen to things and have not heard about this, and neither has anyone else I know - are we all being thick? Or has the FSA said this?

 

Cheers

[saintly_1]

Think they got it the wrong way round Types of mortgages : FSA Money made clear - products explained

[Weird Al Yankovic]

You just have to have something in place to pay off the captal only part, surely?

 

You say you want to 'continue' with a combination of both which, obviously means, you have prior experience of this type of mortgage.

 

What arrangements have changed from before?

Edited May 8, 2008 by Weird Al Yankovic

[patdavies]

You just have to have something in place to pay off the interest only part, surely?

 

 

No, it simply means that the property must be sold at the end of the mortgage term to repay the capital balance.

 

The interest is paid from income, like any normal mortgage product.

[Guest Gertie100]

Yes to Pat Davies (as usual!)

 

We took out part interest, part repayment 2 years, and now really wanted to go full repayment as it was only meant to be a temporary thing.

However with the interest rates - or rather the scare mongering of the media which has led to the mortgage lenders being tighter than a duck's behind, we asked if we could continue on part interest and part repayment.

 

Then they said that in accordance with the FSA guidelines, simply saying you were going to sell the property to pay off the interest part is not enough - you have to physically have to have a "savings plan" to pay the interest off at the end.

 

I would like to know if they are lying through their bums in order to get us to take out a savings plan with them as well...

[saintly_1]

Might be an idea to pose the question directly to the FSA that way you will know exactly what they have said

 

About the FSA

 

 

saint

[Guest Gertie100]

Just spoken to the FSA, and they have advised that we "ask" Nationwide to clarify exactly where the FSA have said this...so basically they were telling fibs!

[dave]

A bank being 'economical' with the truth? I don't believe a word of it!

[Weird Al Yankovic]

Just spoken to the FSA, and they have advised that we "ask" Nationwide to clarify exactly where the FSA have said this...so basically they were telling fibs!

 

But if you are relying on the sale of your house with this type of mortgage, and the value of the house doesn't cover the capital, then how will it be met?

[IdaInFife]

I had a mortgage with RBOS in which you had to have a savings plan to cover the capital. It was a condition of the mortgage.

 

 

Idax

[Weird Al Yankovic]

I had a mortgage with RBOS in which you had to have a savings plan to cover the capital. It was a condition of the mortgage.

 

 

Idax

 

This is what I thought when reading the original post. It's pretty standard stuff, surely? What's the new thing introduced here?

[Guest Gertie100]

2 years ago when we took out the original mortgage part interest and part repayment you did not need to have a seperate savings plan in order to pay off the interest part. We declared at the time that should we get to 25 years down the line and have not made alternative arrangement we would sell the house.

 

The new thing here is that if Nationwide have changed their policy where they won't offer part interest mortgages without a savings plan, fair enough, that's up to them. But to say its the FSA which has made this stipulation? Thats a lie...

 

Nothing has changed as far as the FSA is concerned, and to be honest we are looking to go back onto full repayment, but the point is that Nationwide declared that IAW FSA guidelines we had to have a savings plan.

 

Anyway the savings woman rang from Nationwide on Friday and told me that they don't offer savings plans to cover this as it would make it an endowment mortgage which they dont do...I then asked her to get the mortgage woman to ring me back.

She did, and was extremely stroppy when I asked her to ring me back as I was in the car at the time, apparently she may not have time to ring me back this week!

 

Customer service at its best I think!

(Just off to magic up another £360 per month! - wish me luck!!!!)

Edited May 12, 2008 by Gertie100
Can't spell

[patdavies]

you did not need to have a seperate savings plan in order to pay off the interest part.

 

Surely, the capital part (ie the original sum).

 

The interest is what you pay monthly on an interest-only mortgage.

[Guest Gertie100]

We have part interest and pay repayment, so we are paying the capital part off with our monthly payments and then only paying the interest off on the other part also with our monthly payments.

[indebtstudent]

I believe the position is that Nationwide's policy is that you have to have a suitable repayment vehicle in place. I personally have no idea what the terminology is as I have little to do with mortgages.

 

That person probably didn't have time to ring you back, its all to do with efficiency apparently. By doing everything in no time at all you save on staffing costs BUT you lose out in the end because you spend more time sorting out mistakes.

 

Nevermind eh.

 

Back on topic if Nwide said something that wasn't true then that's bad since they still try to make a big deal of being honest up front etc. Think you need to know if it was an honest mistake or a deliberate attempt to mislead.

 

Neither is good BUT don't forget people do make mistakes. I say this only because, in my expereince, as soon as you work for a financial institution people expect you to be completely infallable.

[Guest Gertie100]

Thanks for your comment - I don't expect them to be superheroes, but I do expect them not to try and tell me that the FSA have put something in place when they haven't...

 

I know a lot of people who have interest only mortgages (complete Interest only, no repayment) and none of them have anything in place to pay the debt off! Some of them are my age still with 23 ish years on a mortgage and time to sort it out, and some who are approaching 50 with no idea what they are going to do...I suppose really we should count ourselves lucky that with a good wind behind us we are able to magic up the extra money...