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Papitogrande

Margin Calls

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I'm on the the record as saying I didn't think they would happen, but seems they are, after a fashion.

I have a client who has an off-set mortgage with Abbey, he's a wealthy fellow and has £100k in the linked savings account, his original mortgage was 85% LTV.

He received a letter from Abbey about 6 weeks ago saying they have 're-valued' housing stock and although he doesn't have to pay anything, should he wish to withdraw money from his Abbey account then he might face a bit of a problem and quite frankly they'd be a lot happier if he didn't try to.

He then got another letter a few days ago saying they re-valued house again and that £100k should definitely stay put.

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I'm on the the record as saying I didn't think they would happen, but seems they are, after a fashion.

I have a client who has an off-set mortgage with Abbey, he's a wealthy fellow and has £100k in the linked savings account, his original mortgage was 85% LTV.

He received a letter from Abbey about 6 weeks ago saying they have 're-valued' housing stock and although he doesn't have to pay anything, should he wish to withdraw money from his Abbey account then he might face a bit of a problem and quite frankly they'd be a lot happier if he didn't try to.

He then got another letter a few days ago saying they re-valued house again and that £100k should definitely stay put.

Interesting, I was considering an offset mortgage at one point as a way of having an emergency fund to draw on in the case of unemployment or illness.

My bank would be a lot happier if I didnt withdraw my savings but that's their problem.

What lets them do this in the contract? Is your client allowed to withdraw any of that 100k?

Or is that 100K just a small fraction of the mortgage and the bank are keeping him within his LTV limits?

VMR.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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