Sunday, May 27, 2007
Another nail in the mortgage coffin
Times: Mortgage rate blunders cost borrowers thousands
Sure banks used to rely on these "innocent mistakes" to round up their profits... expect increased lending spreads and upfront charges... end of cheap credit? Look at the comment in tomorrow's Times "Dirty, rotten banks"... wow! what a headline!
Posted by confused76 @ 01:44 AM (392 views) Add Comment
8 Comments
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1. confused76 said...
Dirty, rotten banks
http://www.timesonline.co.uk/tol/comment/leading_article/article1845269.ece
"Today we report that when a financial checking firm went through the accounts of clients in detail it routinely found errors; invariably those errors were in the banks’ favour. One customer was overcharged by nearly £60,000 on his mortgage as a result of “errors” by his bank. Genuine errors should balance out on the side of bank and customer. Bank errors, however, always seem lopsided. "
2. Bloody Annoyed said...
They really are total bastards on every possible level.
3. Caveatemptor said...
Banks and Building Societies publish their rates on a regular basis and it is up to the purchaser to ensure that he is paying the amounts that were originally quoted for a mortgage. Most people will have several quotes to compare, so will know whether what they are paying is about right.
It really is a case of Caveat Emptor (buyer beware), So the opportunity to check others calculations is always in your hands. Take nothing for granted.
There is nothing mystical about the repayment mortgage calculation, and in my day (the 1960's) 'A' level maths students would work it out from first principles as part of their course. It can be found in dozens of places on the internet
4. confused76 said...
Excellent news from the buy to let side... market is ripe for a crash...
http://business.timesonline.co.uk/tol/business/money/investment/article1844453.ece
Buy-to-let: do the sums add up?
Banks are raising the threshold for would-be landlords, in effect pricing them out of the market. The moves come as the Financial Services Authority (FSA), the City watchdog, has expressed growing concern about the buy-to-let market. It is monitoring a rising trend in buy-to-let repossessions. In February 2006, 8% of properties sold at auction had been repossessed. By December last year, the figure had risen to 25%, and 80% of those properties were situated in postcodes dominated by buy-to-let, with many being new-build flats.
“For some people it’s too late to get into buy-to-let, because the sums just won’t add up. If you’re looking to invest for the first time, you’ll have to buy somewhere that will give an above-average rental yield.”
5. royston said...
"Terry McDowell, 52, an aero-space engineer from Ballyclare, Northern Ireland, was undercharged by Abbey for a £19,000 mortgage taken out in 1982..........the bank had extended his 25-year mortgage by six years."
Wow! If these practices into the future, how are they going to affect the current generation of mortgagees? Previous generations have benefited from constant mortgage payments and wage inflation. So that when homeowners go on to have children and the children go on to school, they have enough salary-ex-mortgage available to pay for these. The current generation of home purchasers are facing mortgage payments which will take a constant proportion of their salaries over their lifetimes. Adding 5 years on in late career, when any redundancy is unlikely to be followed by re-employment, will contribute to the market decline.
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