New EICR to cover any changes made by outgoing tenant?10:00 AM, 4th May 2021
About A week ago 76
Are mortgage lenders having a campaign to ask interest only mortgage borrowers “what are your repayment plans?”
In the last 24 hours I have been contacted by two people, with different mortgage lenders, both telling me a very similar and disturbing story.
The first was my plumber, he popped around to see me yesterday. He has a relatively small interest only mortgage with Bank of Scotland secured against his home. The mortgage has 5 years to run which will take him to age 60. He had been contacted the day before by Bank of Scotland who advised him they were recording the conversation and took him through security before asking him how he intended to repay his mortgage. This alone made him nervous! The purpose of the call was to establish how he was going to repay the mortgage in 5 years time. The reason he popped around to see me is that he felt quite intimidated because he didn’t know what to say to the bank and wondered whether he ought to refinance? However, he’s paying 1% over bank base rate and it would uneconomical to change. Is this what the bank wanted him to do?
I asked him why he felt intimidated and what his plans are. He told the bank he didn’t know how he was going to repay the mortgage and made his excuses to get off the phone. When he had the time to reflect on the discussion he realised that what he had told the bank might trigger the alarm bells and became worried about what happen next.
He gave me the true picture which seemed perfectly feasible. The truth is that he has several options but hasn’t decided which to take. That sounded perfectly feasible to me so I asked him what his options are. He said …
I said “so what’s wrong with that?”.
He said he felt under pressure to provide a definitive answer as the bank only seemed focussed on increasing his payments to a level whereby his mortgage would be cleared within 5 years. mmm!!!
This morning I received a readers letter from a lady who is a residential borrower of Mortgages Express. The scenario she described was very similar but she is worried because she also has several buy to let mortgages on an interest only basis with Mortgage Express.
I would be very interested to hear from anybody who has experienced something similar recently. Please leave a comment below and let me know which lender you were contacted by and whether your loans are personal mortgages on your home or BTL’s. I would also like to know what the outstanding term is because both people who have contacted me to share their stories have said their mortgages have 5 years to run.
I’m wondering whether these stories are pure coincidence in their similarities and timing or whether the mortgage industry have somehow colluded or been instructed to make these calls by their regulators and/or professional bodies.
My response to a call of this nature would be that “I have several options and will let you know which I decide to take in due course”. If the mortgage lender asked me to spell out what those options are my response would be “sorry, I don’t think that’s any of your business. However, what I will say is that I have always honoured my contract with you and intend to continue to do so”.
Over to you ….
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