Shelter’s Income and expenditure figures highlighted13:57 PM, 4th February 2019
About 2 weeks ago 35
An article from Mortgage Strategy which explains that six of the top ten lenders say they use ‘all monies charges’ in residential mortgage documents, letting them repossess homes if borrowers struggle with non-mortgage debts.
Click here to see the full article..
The charges give lenders the right to secure non-mortgage borrowing, such as credit card debt, on mortgaged properties.
It might be time to double check your mortgage details, or check if you’ve got other debt/credit with them!
Ray Boulger, John Charcol senior technical director said: “It’s the sort of thing that you won’t see in the standard mortgage conditions. If you look at lender criteria, it will never tell you whether there will be an all monies charge or not.
“In many cases you wouldn’t know about it until you got the mortgage offer. By that stage you are likely to be fairly committed, and if it’s a purchase you are unlikely to have time to reassess.”
An Example clause from HSBC says a mortgage “will cover all and any debt you have with HSBC and it is not just limited to the amount of your mortgage debt”.
“The debt may include overdrafts, loans, credit cards or money due under any facilities that HSBC has granted to you or grants to you in the future. They may also include any liabilities under any guarantee or indemnity that you have given, or may give in the future or for liabilities incurred by HSBC on your behalf.
“If any of the debts and or the other liabilities are not paid when due, HSBC can take possession of your property and other assets, sell them and put the money from the sale towards the debts and/or the other liabilities.”
Companies using these types of charges include HSBC, RBS, Barclays, Santander, Virgin Money and Yorkshire Building Society.
This is less likely to affect Buy to Let borrowers who general do not bank or borrow other monies from their lender.
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