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Shared Ownership Mortage


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Hi pls can i have some help and advise. We have had our mortgate on a 40% share (75k) for 2.5 years. The mortage is only in my partners name (my credit was not good at the time) and we got the mortagage on a 100% deal. My partner is self employed. Has been and was when the mortgage was taken out.

Since we have moved into our home my partner has been in and out of work for the whole 2.5 years and also spent months without work. We were on a capital payment on a fixed 7.89% (Leeds Building Society). Due to hardship, my partner did not paid the mortgage for months.

Nor did he pay the rent to the HA. In total we owed the HA approx 3k and the building society 3k. A finicial advisor came to visit us and told us that we needed to move onto a interest only deal however this has only made a difference of around £50 per month on our mortgage. (The Building Society agreed to add the arrears of the mortgage and the arrears of the HA to the end of our mortgage term) We are still with the Leeds but since July 2010 we have been moved to a interest only mortage. I think that the payments are very high and do not know what to do. our utility bills have gone up this winter and with the VAT increase and no doubt our service charges with the HA going up we are going to struggle. We do not want to have to have so may cut backs for the rest of our lives just to own a mortage especially one where out mortgage and rent is over £1100 per month (ex bills) and we only own 40%. Please can you give me some adivse. Are we paying far too much on our mortgage (£630 pm) on an interest only?

Edited by chilli_bird
wrong year added. 2010 not 2011
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Right,your lender has whats called a standard variable rate,this is the rate that they charge on their mortgages,unless you are in a fixed rate deal your payments should fall and rise in accordance with fluctuations in the Bank of Englands base rate.your first port of call should be with your lender to find out (as i suspect to be the case) that your intrest only payment are still fixed at 7.89% which to me seems high.We need to know how long the fixed rate has to run,so you have some phone calls to make and some reading to do,then come back to this forum and we can go from there.

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Hi Newstarter

Thanks. I looked at some numbers and have noticed this. We were on 7.89% paying back £580 per month on our mortgage (25 Y). We were told when the finicial advisor visited us that we would be moved on to an interest only.(Not Sure if this started a new fixed term)

We are now paying back £630 per month (some of this may be what we owed the HA but i thought that was going to be added onto the end of the mortgage term). I still think that 7.89% is v.high. I have sent the building society a letter by email to ask them some questions as to why our payments have gone up so much.

Advise would be appreciated

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yourlender can only capitalise whats owed to them not the H.A,however question why on intrest only you are paying the fixed rate which is higher than the standard variable which should be around two points above the base rate.

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Hi pls can i have some help and advise. We have had our mortgate on a 40% share (75k) for 2.5 years. The mortage is only in my partners name (my credit was not good at the time) and we got the mortagage on a 100% deal. My partner is self employed. Has been and was when the mortgage was taken out.

Since we have moved into our home my partner has been in and out of work for the whole 2.5 years and also spent months without work. We were on a capital payment on a fixed 7.89% (Leeds Building Society). Due to hardship, my partner did not paid the mortgage for months.

Nor did he pay the rent to the HA. In total we owed the HA approx 3k and the building society 3k. A finicial advisor came to visit us and told us that we needed to move onto a interest only deal however this has only made a difference of around £50 per month on our mortgage. (The Building Society agreed to add the arrears of the mortgage and the arrears of the HA to the end of our mortgage term) We are still with the Leeds but since July 2010 we have been moved to a interest only mortage. I think that the payments are very high and do not know what to do. our utility bills have gone up this winter and with the VAT increase and no doubt our service charges with the HA going up we are going to struggle. We do not want to have to have so may cut backs for the rest of our lives just to own a mortage especially one where out mortgage and rent is over £1100 per month (ex bills) and we only own 40%. Please can you give me some adivse. Are we paying far too much on our mortgage (£630 pm) on an interest only?

 

Hello Chilli_bird

 

As suggested by newstarter, you need to seek clarification from Leeds Building Society in relation to the balance of the mortgage (original advance, charges and details of any further advance) and what interest rate is now applied to the account.

 

Going on the above

 

The Mortgage is £75,000

Capitalised Arrears £3,000

Possible further advance of £3,000 (to pay HA)

 

Total balance £81,000 @ 7.89% this would give you a monthly repayment of £532.75 or there abouts depending upon how the interest is calculated and applied to your particular mortgage.

 

The standard variable rate referred to by Newstarter for Leeds Building Society is currently 5.69% so it is unlikely that you have been transferred onto that.

 

My concerns are that you have said that the financial advisor said that you need to move onto an interest only deal. The use of the word deal by an advisor would suggest a change to the the interest rate (if a new interest rate product was applied). This could be the source of the confusion.

 

As you was on a fixed rate, to come out of that deal (not applicable if it was just a change to interest only) you would most likely have been charged an early repayment charge (ERC) which could have been added onto the balance of the mortgage.

 

You need to find out

 

1) Mortgage Balance (and what it is made up of)

2) The interest rate applied to your account.

 

On a seperate note remember that you can reclaim all the charges and fees via the FOS (excluding the erc).

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