B&B buy-to-let mortgages: Your tales
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http://news.bbc.co.uk/go/rss/-/1/hi/uk/7644476.stm Version 0 of 1. Buy-to-let mortgage owners are worried about the situationSome people who have mortgages with Bradford & Bingley, or its subsidiary Mortgage Express, are worried about how the bank's nationalisation will affect them. The government has taken control of £50bn worth of mortgages and loans and the bank's saving assets are being sold to Spanish bank Santander. Deborah Hollis Deborah Hollis is concerned about her two properties Businesswoman Deborah Hollis, 47, is in a quandary over her two buy-to-let mortgages with Mortgage Express. The mother-of-two bought two properties specifically to rent out to tenants in Chelmsley Wood in north Solihull just over three years ago. She said: "My original agreement was for two three-year fixed-rate 85% mortgages on each of the properties. "I chose to enter the market as it was the only option I had if I wanted a proper pension pot. "Both properties are still self-funding, I have decent tenants and, after paying a managing agent, I break even on a monthly basis." The first of her mortgages, on a three-bedroom, end-terraced property, expired in June. This time she chose to pay a standard variable rate so that she would be able to sell it once the price rose again. She said: "My mortgage went up by about £100 a month from £320 to around £433." Her second mortgage, on a mid-terraced three-bedroom home, is due to expire in October. Mortgage Express has quoted her a new standard variable rate of about £505 a month, but has not yet confirmed that figure. <a class="lp" href="http://news.bbc.co.uk/1/hi/talking_point/default.stm">HAVE YOUR SAY</a>I am terrified. We have recently retired and have our life savings of over £100, 000 in one of the banks which have been mentioned in the newsLaura<a class="" href="http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=5425&edition=1&ttl=20080930231134">Send us your comments</a>She said her calculations for a 6.8% standard variable rate led her to believe she should be paying £493 a month. She said: "I was extremely concerned when I received the letter from them. "But if I enter into a new fixed-rate arrangement I will have to pay a lot more, including arrangement fees, and I'll be less free to sell without facing penalties." Ms Hollis, who works for an independent travel agency, said she did not know what to do. "Now that Bradford & Bingley's nationalised, the government owns my mortgage - yet it is the same government that is helping to contribute to the value of my homes decreasing. "It's not just me who will be affected but the two families who rent from me too." Phil Collier Phil Collier has rented his flat out for three years Computer trainer Phil Collier from Grantham has had a run of bad luck this year and he is now worried that if the interest rate on his mortgage increases any more, he will not be able to cope. The 38-year-old was made redundant from his job as a computer trainer at Fenland Foods in August and spent his pay-off on necessities. He is now trying to find tenants for his £59,000 ground floor one-bedroom flat after the downturn in the housing market made it too difficult for him to sell. He said: "I've had interest after I said I would let it without a deposit but am instead relying on my insurance company carrying out credit checks. "My two-year fixed rate mortgage with a 4.5% interest rate runs out in October. I have been paying £258 a month interest only but now that will shoot up. "My new standard variable rate mortgage will cost me £330 a month with 6.75% interest. Bradford & Bingley offered me a 6.5% fixed rate or a £2,000 discount but that would tie me in for another three years - something I do not want. "I can't even remortgage with anyone else because I do not have the equity. It is a no-win situation for me." He said he was concerned about how the government would treat his mortgage once the nationalisation was complete. "My budget will be extraordinarily tight," he said. Although he now has a new job as a trainee assistant manger for the Spar supermarket chain, his pay is almost £6,000 less than what he had been earning. He said: "I did not buy the flat as a long-term investment but I moved out of it three years ago when I was ready for a bigger place. I rented it out because that was the best option for me then. "I do not know what to do - but I really believe the taxpayer should not have to pay for the mess Bradford & Bingley is now in." Satwant Bhogal Satwant Bhogal could not get an extension on his mortgage Father-of-two Satwant Bhogal wanted to extend the amount he was borrowing on his buy-to-let mortgage by £40,000. He was planning to use the money to renovate his three-bedroom semi-detached rental house in Banbury in Oxfordshire. Mr Bhogal asked Mortgage Express if they would let him do it on Friday last week and the answer was yes. He said: "I rang again on Monday morning and was told everything was still going ahead and all I needed to do was fax some documents over to their head office. "I called in the afternoon after hearing about the problems Bradford & Bingley was facing and was told actually the answer was no and there was a complete freeze on borrowing. "I've had a fixed rate mortgage on the £180,000 house for about 10 years. The interest was 5.9% and I paid a little over £520 every month - I've never had any problems before." The 41-year-old said he had tried speaking to other banks but it was just too difficult to get an extension on the loan and he has had to give up on his renovation plans. The mobile network engineer said: "I'm worried about what it means for the future as the problem is just going to get worse. "There are fewer organisations offering by-to-let mortgages and I think a cartel situation is going to emerge. "There's just not enough competition around so this increasingly smaller number of lenders can dictate what they want to charge. "Ultimately the customers, like myself, are going to suffer." |