Mortgage Fees... highway robbery

[harpo_72]

Sorry but paying off the mortgage or reducing to a low point which could be cleared at the point when interest rates go up is the best policy.
Interest on loans is dead money.. so get rid.
Presently Borrowing is cheap and spending is being encouraged as you have no savings interest of note. Isas are devalued as the markets have dropped. By all means borrow money at a low rate and chuck in an ISA or put in your savings.. but you will have to wait until we have recovered to really profit.
Personally I would save in an isa and then pay a chunk of mortgage off at renegotiation point.
Would I take a pension out? I have a company one but they charge too much in admin fees and will always release in the least favourable value to me .. let me own my houses and I will off load when it benefits me.
Financial services charge too much for too little .. but then again the choice is yours.
Car loans and PCP deals are not worth looking at if the APR is over 2% .. the law should set a max over base that these can be offered to stop financial issues. Plus the level of lending should be strictly adhered to.
I will say it again interest is dead money don’t pay it .. make people work to earn.
The banks have benefited from this situation they have not lost a penny they have not helped us .. some soft soothing words do not resolve the issues they will be round to collect.

 

[jim8flog]

I think those days are gone... now interest calculated daily by many banks rather than monthly or yearly. So if i put 100 quid on 15th Jan, then it goes off principle straightaway. Worst case goes off at the end of the month. Hence when you look at the mortgage statement, these days - on a 2k morgage, it will show 1K interest and 1k principle in Jan, 999 interest, 1001 principle in Feb and so on. If you make a overpayment in March, then it will change the calculation for April.

BTW, the Yearly rest may still be valid for some banks/societies

The last time I had a repayment mortgage was the first one I ever had back in the 1970s and have always had interest only mortgages since. I stopped working in Financial services many years ago hence my 'the way it used to work'. My current mortgage is a lifetime interest only mortgage and works on the year end basis probably because any repayments are optional.

 

[Mudball]

The last time I had a repayment mortgage was the first one I ever had back in the 1970s and have always had interest only mortgages since. I stopped working in Financial services many years ago hence my 'the way it used to work'. My current mortgage is a lifetime interest only mortgage and works on the year end basis probably because any repayments are optional.

Agree that might work in that context... unfortunately, i cant think of a interest only one.. but it is an interesting proposition... The bet is that house prices will go up... I think my LTV needs to drop a bit more to give me that comfort..

 

[jim8flog]

Agree that might work in that context... unfortunately, i cant think of a interest only one.. but it is an interesting proposition... The bet is that house prices will go up... I think my LTV needs to drop a bit more to give me that comfort..

I am of an age when the vast majority took out investment linked (such as endowment, pension or in later years ISA) interest only mortgages they made a lot more sense at the time than repayment mortgages. Although slightly more expensive the total return far outweighed the extra cost eg before the financial crisis someone with an 80% endowment ie the guaranteed sum was 80% the mortgage the policies normally returned about 1.40 x mortgage. Pension polices were the best because you got tax relief on the pension payments

Obviously I have not done the figures in years but with a repayment mortgage if you only pay the minimum required with a 25 years mortgage it used to be that you only were 'really' paying off the mortgage in the final 8 or so years because the repayment element of the monthly amount was so small.

 

[IanM]

ah, the same folk who sold us oldies Endowment Mortgages, are now trying to sell pension products!

 

[harpo_72]

ah, the same folk who sold us oldies Endowment Mortgages, are now trying to sell pension products!

And come cash in time, they will choose the lowest possible payout and will have taken 30 pence in every pound you invested.. but they have a nice caveat that says your investment can go up or down.. I am waiting for a car manufacturer to state your car may not start every day .. loss is just poor management and half of them are just gambling your hard earned away and getting rather large bonuses ..

 

[jim8flog]

On a personal level I was more than happy with my Endowment Mortgage. It meant my mortgage was paid of absolutely years before I reached 65 despite several house moves which would have necessitated a new repayment term had I gone the repayment method.

Mind you I did endowments with guaranteed payouts not just the cheapest ones I could afford.

 

[StevenMorrison]

To date, the pandemic has taken over every part of our lives. It's probably hard to imagine that once everything was fine. To a greater extent, this has also affected the financial sector. To begin with,as the owner of a chain of coffee shops, I felt the crisis during the pandemic and there was practically nothing I could do about it. But on the advice of a friend, I decided to try to additionally invest in the development of a popular online store. Because of the crisis, I had to take out a loan. After studying many sources of information I accidentally came across https://www.moneyexpert.com/loans/what-to-do-if-you-cant-pay-back-a-loan/ and I didn't regret trusting them. This investment helped me start earning money at a difficult time for everyone and the demand for this industry continues to grow even now. I hope my experience helped you make the right decision.

 

[Mudball]

in fact, I understand you and fully support you

Interesting conversation with the bank. They have offered a 1.29% fixed. Asked them about interest only and got put thru retention. They will offer a part and part deal which I think is a good idea. Waiting to hear more more about it

 

[JackDuncan]

Please tell me if I lost my job during the quarantine and haven't yet found a new one, can I reduce the mortgage interest or freeze payments for a while? I've heard that refinancing a mortgage can reduce monthly repayments, and I want to use this to buy some time. Of course, I know that I should contact a specialist who understands this, but I do not have the money to hire someone, so I found a company through which I can get mortgage advice essex for free. And They said that they know how to handle it. Has anyone delt with them?

 

[jim8flog]

Please tell me if I lost my job during the quarantine and haven't yet found a new one, can I reduce the mortgage interest or freeze payments for a while?

I would suggest you talk to your lender rather than a golf forum. It is always best to let them know before things get out of hand in the first place.

 

[sunshine]

The last time I had a repayment mortgage was the first one I ever had back in the 1970s and have always had interest only mortgages since. I stopped working in Financial services many years ago hence my 'the way it used to work'. My current mortgage is a lifetime interest only mortgage and works on the year end basis probably because any repayments are optional.

Your lender may present the calculations to you this way in an annual statement for simplicity, however the actual calc will be daily. If you increased or reduced the loan principal you would see the interest calc change from the following day.

 

[jim8flog]

Your lender may present the calculations to you this way in an annual statement for simplicity, however the actual calc will be daily. If you increased or reduced the loan principal you would see the interest calc change from the following day.

Not really worried either way as it is equity release and I do not intend to make any repayments. The increase in value of the property has way outstripped the added increase in the amount on loan.

 

[sunshine]

In some respects, the value of your home is irrelevant if you plan to just live in it. I wish I had got on the property ladder sooner, but when I look at prices today I consider myself lucky to be on it already. Affordability (especially in the south east) is just not right and I don't really understand how it got there.

 

[SwingsitlikeHogan]

Please tell me if I lost my job during the quarantine and haven't yet found a new one, can I reduce the mortgage interest or freeze payments for a while? I've heard that refinancing a mortgage can reduce monthly repayments, and I want to use this to buy some time. Of course, I know that I should contact a specialist who understands this, but I do not have the money to hire someone, so I found a company through which I can get mortgage advice essex for free. And They said that they know how to handle it. Has anyone delt with them?

When we were struggling a bit with our monthly repayment we agreed an extension of 5 yrs to our repayment period. This took the end date out to my 70th birthday - when previously it had been my 65th - but reduced our monthly payment by a third - a good few hundred pounds.

This meant that, assuming I still aimed to retire at 65, we'd still have a not inconsiderable residual amount to pay off due to our extending the period. However we knew that one way or another we would have the funds to clear the residual amount when I retired at 65 (or whenever). Indeed that is exactly what happened - my wife retired from the NHS and we used some of her pension lump sum to pay off our mortgage.

You would only do this with Finance Advisor advice as you most probably wouldn't want to be stuck with a significant monthly mortgage payment after you retire. And I note that we might only have been able to do this as we only had 10yrs or so to go - and so increasing that period to 15yrs (rather than back over 25yrs say) might have been what made it very straightforward.

 

[Bunkermagnet]

Subtle spam, don't be fooled

 

[Captainron]

Most banks and companies make much money from mortgages. But the only thing they do is cheat ordinary people.

Banks allow people to purchase homes by lending them money. A rate if interest is applied. Fees are shown prior to any agreement being signed by the customer. No cheating there?

 

[Oddsocks]

I think the op’s issue was that he was staying with the same bank. With no re evaluations needs etc as he’s been with them years, I’m in agreement as simply he’s being charged for being loyal and it’s not a small fee either.

 

[jim8flog]

When we were struggling a bit with our monthly repayment we agreed an extension of 5 yrs to our repayment period. This took the end date out to my 70th birthday - when previously it had been my 65th - but reduced our monthly payment by a third - a good few hundred pounds.

.

Interesting that. Part of the reason I now have a lifetime mortgage ( with another company) was because my original lender refused to extend my mortgage beyond the age of 65.

 

[Crazyface]

I've been lucky with mortgages. Even with the endowment one, which looks as though it will hit it's original value in two years, although the house is long gone. We will be mortgage free in 6 months, all being well. I'll be able to retire, but think I'll keep on working for now as I enjoy the crack at where I currently work. Plus the benefits are good too.