discounting mortgage balance?

[Raja]

Hi, thought I'd venture out of the car pages

Several years ago i bought a really nice converted flat in the middle of Manchester. It was on one of them self cert mortgages with Gmac. Sometime last year i got a letter off a company called web resolutions saying they'd bought my mortgage off gmac.

I've been receiving the odd letter off Webb and recently went on google to see who these guys were. It seems they buy mortgages for considerably less off other companies. Anyway, I'm getting annoyed with them and would look at remortaging elsewhere if my current deal wasn't as good as it is.

I've come across something where companies like Webb discount your mortgage balance if you take your business elsewhere. Has anyone done this? Is there a profile to customers who get this offered to them? What sort of discounts are on offer?

I bought the flat for 215k at a high point in the market, I owe 180k on it. Never missed any payments, no bad credit etc

Regards

[Sarnie]

This only used to happen with Subprime lenders who were desperate for people to redeem their mortgages rather than keep them on their mortgage books.

From the info you have given, you've got no chance of getting a discount. Why would they?

[Raja]

They're a sub prime lender. The flat is probably in negative equity and from what i've read they bought mortgages like mine for c60% the amount i owe. Better to make a 20% profit in a short period of time than risk losing money in a repossession and auction where a flat like mine would probably go for 100k

But seeing as i never miss any payments you're probably right - why would they?

[Sarnie]

Your not a subprime client.

Miss 12 months of payments and you may find they offer you a discount to get rid of you.

Do that you can forget getting a mortgage anywhere else.

Just because they may have paid less than 100% for your mortgage account why would you think that absolves you from 100% of your debt?

[Raja]

I think if i miss 1 month with this lot I'll end up in trouble never mind 12 months.

Think I'll have to raid some savings and get the mortgage shifted at some point this year instead. Really don't like the way they've been doing business with me since they took over the mortgage and once interest rates start going up (mine is a standard variable rate) I'll shift.

[Sarnie]

Raja said:

I think if i miss 1 month with this lot I'll end up in trouble never mind 12 months.

Think I'll have to raid some savings and get the mortgage shifted at some point this year instead. Really don't like the way they've been doing business with me since they took over the mortgage and once interest rates start going up (mine is a standard variable rate) I'll shift.

Be prepared for a huge hike in payments.

Your flat is probably at 90% LTV, if not higher.

90% rates are around 5.5%+

So, assuming your 'good rate' is on their SVR of 2-3%, be prepared for your payments to double.

[Raja]

Thanks for the advice.

Some you win, some you lose

[Jockman]

Sarnie's given you a useful indication of figures.

Remember your original mortgage was a self cert.

That could complicate things if you need to self cert again. Lenders are getting really twitchy about these. Did I read somewhere that many lenders will either no longer allow them, or may charge a premium for them ???

If so, then the idea of moving could be slightly more costly still.

[scotal]

Jockman said:

Remember your original mortgage was a self cert.

That could complicate things if you need to self cert again. Lenders are getting really twitchy about these. Did I read somewhere that many lenders will either no longer allow them, or may charge a premium for them ???

True self cert mortgages simply don't exist at the moment.
Nonverification mortgages do, but they are at the lenders discretion, and based on LTV and credit score. If there is anything in the slightest bit interesting to the lender they will want to see all the relevant paperwork. The lovely people at the FSA want to ban self cert, but they haven't got round to it yet. (I believe they are consulting, so as usual the vested interests will be out in force)
There's going to be a huge number of people who simply cannot remortgage over the next few years. The products that allowed them to state their income don't exist, and their provable income won't support the loans they already have.