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jethrotull

Nationwide Mortgage Fees Up

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I had a letter through my door this morning from Nationwide saying they're imposing unlimited "non-consent letting fee".

Even with their permission letting is +1.5%.

What got me was the little charges, like for switching to repayment mortgage, for paying off the mortgage, release of equity, etc. I have a bog standard interest only mortgage, but I have always overpaid, changed the term, switched to repayment for a months at a time, and then withdraw some equity later. I found it much cheaper to take interest only and overpay, than to take a repayment. For example the interest calculation used to favour repayments on an interest only mortgage.

It looks like I have until September to pay the mortgage off to avoid all those charges. Is this what they want?

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I had a letter through my door this morning from Nationwide saying they're imposing unlimited "non-consent letting fee".

Even with their permission letting is +1.5%.

What got me was the little charges, like for switching to repayment mortgage, for paying off the mortgage, release of equity, etc. I have a bog standard interest only mortgage, but I have always overpaid, changed the term, switched to repayment for a months at a time, and then withdraw some equity later. I found it much cheaper to take interest only and overpay, than to take a repayment. For example the interest calculation used to favour repayments on an interest only mortgage.

It looks like I have until September to pay the mortgage off to avoid all those charges. Is this what they want?

I knew I read this somewhere recently.

It think the banks know something we don't (well something the sheeple don't) they are clawing in as much money from mortgage holders now before it all kicks off. Lloyds incouraging overpayments and cutting back IO are further examples.

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From the link:

Nationwide mortgages are designed and priced for people who live in their homes. The Mortgage Works (TMW), Nationwide's specialist lending company, design and price mortgages for people looking to rent out their property, known as Buy to Let mortgages. The reason they are termed as specialist mortgages is because they carry an additional risk and administration cost. When properties on a Nationwide residential mortgage are rented out we too experience this additional risk and administration costs and it is only fair that those people who rent out their property should meet these additional costs rather than our membership as a whole.

Seems reasonable to me.

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Check the fees estimate table.

Lets go with a pretty common liar-loan scenario.

You are a boomer in your 50s. You've paid of the mortgage on your home. In 2007 you bought a BTL with a liar-loan on a 25 year interest only residential mortgage. The house cost you £200,000.

According to the nationwide web site, in December your monthly payments will rise by £250.

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Check the fees estimate table.

Lets go with a pretty common liar-loan scenario.

You are a boomer in your 50s. You've paid of the mortgage on your home. In 2007 you bought a BTL with a liar-loan on a 25 year interest only residential mortgage. The house cost you £200,000.

According to the nationwide web site, in December your monthly payments will rise by £250.

`and in ten years house might sell for £140k :huh:

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What they have done is make these fees part of the tariff rather than the mortgage agreement, which means they're now free to vary these at will. It effectively means any changes get lumped into the mortgage and you now pay interests on their fees.

It looks like they really, really want people to cash in their mortgages, but have pressure from the government not to do it by raising interest rates. It is still part of the cost of the overall transaction, just excluded from government and best-buy stats.

It is like the bank's know they need to be sitting on as little debt as possible by the end of the year. It is just the public that aren't yet aware of what is happening.

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It looks like they really, really want people to cash in their mortgages, but have pressure from the government not to do it by raising interest rates.

To be more accurate, they want the high-risk customers to move their mortgages elsewhere. If you have 50% equity they'd like to keep you.

They want to be sitting on as little RISK as possible.

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Apologies this is a bit off-topic, but what exactly counts as 'renting out your home'? Does it mean when you rent out the whole house and live somewhere else? What about if you live in the house but sub-let one of the rooms, maybe to help pay the mortgage?

Or is this one of those 'grey area' questions that you don't mention unless asked by the lender directly? I'm vaguely aware that there is an allowance of around £4500-ish a year that the government won't tax you on if you sub-let. But I could easily have misunderstood this bit...

I'm not an owner but if I do buy I want to be forewarned of the consequences if I need to rent out a room to make ends meet. (1.5% is quite a big charge!)

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Apologies this is a bit off-topic, but what exactly counts as 'renting out your home'? Does it mean when you rent out the whole house and live somewhere else? What about if you live in the house but sub-let one of the rooms, maybe to help pay the mortgage?

Or is this one of those 'grey area' questions that you don't mention unless asked by the lender directly? I'm vaguely aware that there is an allowance of around £4500-ish a year that the government won't tax you on if you sub-let. But I could easily have misunderstood this bit...

I'm not an owner but if I do buy I want to be forewarned of the consequences if I need to rent out a room to make ends meet. (1.5% is quite a big charge!)

Generally you can take in lodgers as long as you are the main occupier and you don't give them an AST, but check your contract.

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where's fionulululoolala? haven't seen her for years.

She's no longer with Nationwide. She landed a position as an economist at RBS, and also is a Housing Market Economist independent consultancy.

Economist

Royal Bank of Scotland

(Public Company; RBS; Banking industry)

February 2010 — Present (4 months)

Housing Market Economist

Independent Consultancy

(Financial Services industry)

June 2009 — Present (1 year)

Chief Economist

Nationwide building Society

(Privately Held; 10,001 or more employees; Financial Services industry)

March 2005 — June 2009 (4 years 4 months)

more..

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  • 261 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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