Mortgage Term

D

DOS19

Registered User
Messages
51
I’m a young first time buyer at the beginning of my career. I have been offered a 100% mortgage with a Lender and this Lender has offered me the best rates so far but the 40 year term is at least 5 years longer than I would like it to be. The Lender will not budge on the issue of the mortgage term. I believe that I can easily afford a shorter-term mortgage. In fact the longer term will only result in a saving of €60 a month over a 35 year term (the maximum offered by the other banks).

The Lender has told my broker that it will “revisit the issue” of changing the term in “a year or two” once I have a positive mortgage repayment history behind me but it will not put such a commitment in writing.

Accordingly, I would appreciate it if somebody could advise as to how likely it is that the Lender will keep to this verbal commitment to change the term of the mortgage. Are Lenders very reluctant to change the term of a mortgage? I am somewhat anxious as it will be an Affordable Homes mortgage and will not be able change Lender in the event that the Lender refuses to revisit the matter. This Lender has offered me the best rates though.
 
can't you just over pay and shorten the term that way?
Click to expand...
Some lenders will not allow you to do this or will charge you (eg- Bank of Scotland: however, we are looking into the legality of them making such a charge).

You need to read the terms of the agreement to find out if they will allow you to make increased payments, or alternatively, save the balance of the cash you have available & make an yearly contribution.

Bank of Scotland (as it stands currently), do allow us to make lump sum payments which will reduce the monthly payment, but NOT the term - adjusting the term carries a €95 fee each time. I'm not sure who you bank is so the T&C's could be different (EBS was our previous lender and they had no penalties for early payment & adjusting the term downwards)

Talk to your broker as he will know the bank & how likely they are to stand over what they have said.
 
Thanks for the advice.

sam h said:
Some lenders will not allow you to do this or will charge you (eg- Bank of Scotland: however, we are looking into the legality of them making such a charge).

You need to read the terms of the agreement to find out if they will allow you to make increased payments, or alternatively, save the balance of the cash you have available & make an yearly contribution.

Bank of Scotland (as it stands currently), do allow us to make lump sum payments which will reduce the monthly payment, but NOT the term - adjusting the term carries a €95 fee each time. I'm not sure who you bank is so the T&C's could be different (EBS was our previous lender and they had no penalties for early payment & adjusting the term downwards)

Talk to your broker as he will know the bank & how likely they are to stand over what they have said.
Click to expand...
 
You must log in or register to reply here.
Back
Top