Pushy Lenders?

Pushy Lenders?

8:00 AM, 4th April 2024, About 3 months ago 2

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Most lenders take a fairly relaxed approach to interest-only, but I`m wondering if ones who are a bit pushy are within their rights?

After interest rates rose so much we agreed to a period of interest-only with a repayment-type lender which they agreed to and put in writing. All payments have been met in full and on time from inception.

With 8 years remaining, they are now pushing for valuations, which is not prudent for us as it is a low market with many landlords trying to sell.

Other lenders are not so pushy, they sometimes write near the end of the loan term, but that`s it. These lenders are ringing and making demands.

Can I just ignore their calls and demands?

They`re causing unnecessary stress and anxiety.

Has anyone else had experience of this?


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Cider Drinker

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8:47 AM, 4th April 2024, About 3 months ago

The market is what the market is. House prices remain stubbornly high.

Higher interest rates have failed to deliver lower house prices because demand is stronger than ever, thanks mainly to a spectacularly failed migration policy.

Lenders have every right to demand a new valuation to ensure the longevity of their business. I’d be reading that small print in your loan agreement paperwork.

Howard Reuben Cert CII (MP) CeRER

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17:38 PM, 4th April 2024, About 3 months ago

Hello Grahame

I am a mortgage broker (31 years experience) and I can categorically state that every lender has always had the right (within their commercial lending policies, criteria and terms) to review their mortgage book, to assess current LTV's, to do interim credit checks, to check on who the occupants are, and a myriad of other commercial due diligence processes too.

To alleviate your stress though, even if they are asking for valuations, as long as your LTV is within the agreed lending limits, then there should be no concerns anyway.

If you have fallen in to a higher LTV bracket (maybe due to reducing house prices), and if you have other properties / equity (or cash), they may ask you to utilise these other resources simply to rebalance your portfolio.
For future mortgage strategies, when we are asked about repayment versus interest only, we often recommend the 'flexible interest only' approach, where you can overpay (without charge) whilst you have tenants in place and the rent is coming in (ie treating the mortgage as though it's a repayment basis loan), and when you need to reduce the payments (or want to), simply reduce it down to the contracted interest only level. Not all lenders allow this, but we know the lenders who say yes.

Hope this helps re current stress and also for forward planning.

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