Should we fix rate with ptsb split mortgage before switch to pepper?

Discussion in 'Mortgage arrears & negative equity case studies' started by GlenML, 14 Jan 2019.

  1. GlenML

    GlenML Registered User

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    Hi Brendan

    I was sold to pepper..we have main amount of €170k and warehoused of €90k..currently on 4.5% svr on main amount..could get 3.7% fixed with TSB before the transfer in a few months..should we fix now..? Not sure what pepper can do regarding rates in the future as their rates are different to ptsb, and they have higher rates for people with credit issues , although the split is on our icb report I wouldn't say we have bad credit, we have no arrears..could they try put us on to these higher rates after a review..? we have 25 yrs left on the mortgage.

    Been split since 2013. In a position now to start putting off warehoused amount interest free preferably..not going to combine amounts until review is done with pepper..planning on putting the difference in to another saving account and paying in to the split in a lump sum before review of the amount we have saved..?

    Would these savings be been seen by another lender as affordability to remortgage to get away from pepper in the next couple of years...?

    Regards
    Glen.
     
  2. Brendan Burgess

    Brendan Burgess Founder

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    Difficult to know.

    First of all, you should move immediately to the Managed Variable Rate.

    upload_2019-1-14_8-35-35.png
    You will save at least 0.2%. You will save more if you have more equity which you probably have.
    Ptsb would have written to you about this. You need to get one of their valuers out to value your house. ptsb will pay for it.

    The repayments on €90k @ 4.3% would be €500 a month, €3,600 of which is interest.

    So, you should be very slow to voluntarily give this up. If you give it up today, it will take 5 years before your ICB record is clean and you can switch to another lender.

    Your effective interest rate today is
    €170k @4.3%
    €90@0%
    = €7,300 interest
    on a mortgage of €260k
    = 2.8%

    That is not bad. You won't save much by switching to another lender.

    Brendan
     
  3. Brendan Burgess

    Brendan Burgess Founder

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    A good strategy. At the review, if Pepper sees that you have been saving €500 a month, they will, not unreasonably, want you to move the money from the warehouse to the main loan. You can do that and then use the accumulated savings to reduce the balance.

    Of course, if Pepper does not get around to reviewing the split for some time, you could have a good balance.

    I doubt it. If the only way you can have savings is by not making any mortgage payments when they are due, it would be very odd for a new lender to factor them in.

    Brendan
     
  4. GlenML

    GlenML Registered User

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    Thanks Brendan
    Is the better option to go on the managed variable rate or fixed rate for 2 to 5 years which is 3.7% currently...? Depending on our LTV our rate could be more than that according to you screen shot..but is it the better medium term option.
    Glen.
     
  5. GlenML

    GlenML Registered User

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    It wouldn't be at the expense of savings..not that we would be saving a huge amount but we basically can now afford to go on full payment but want to take full advantage of the 0% aspect of our deal...no offence but I feel TSB have shafted us considering they offered us split as a long term option and we stuck to it rigidly as it was a great help in all honesty, but I feel no obligation anymore since the transfer to glenbeigh.
     
  6. GlenML

    GlenML Registered User

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    Last edited: 14 Jan 2019
    1 more question Brendan..
    Seeing as TSB split mortgage states you pay thr warehoused amount at the end of the mortgage and they have told me in my last review that the deal was you can increase your payments or still just pay at the end can pepper make you incorporate some if not all of the warehoused amount if your finances allow it or can we refuse and leave it until the end of the term as we can with TSB currently??

    By the way we have 150k left in main mortgage + 90k warehoused and not 170k + the 90k warehoused that i said above...and the value of the house is approximately 280k at present.

    Thanks again
    Glen.
     
    Last edited: 14 Jan 2019
  7. Brendan Burgess

    Brendan Burgess Founder

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    €260k/€280k is 93% Loan to Value so the MVR would be 4.3%. So, you should probably fix instead.

    The split mortgage allows for a review every three years. If you can afford the full repayments, they are contractually entitled to allow them.

    Whether you feel an obligation or not is a bit irrelevant. You have to pay your mortgage. You want to get your credit record clean. So when the next review comes up, you should go back onto full repayments and use the money you saved to reduce your mortgage.

    Brendan
     
  8. GlenML

    GlenML Registered User

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    Last edited: 15 Jan 2019
    Screenshot_20190114-031016_Chrome.jpg Thanks for that Brendan...

    But am I contractually obliged to except the reviews findings and enter in to a higher payment.. or leave the same amount in the warehouse until a future date and continue to pay only the main mortgage only for as long as we want..?

    My understanding from TSB is the warehoused amount is to payed by the end of term.

    We have got loans since the split.

    If we go for MVR is that set for the remainder of the term of the mortgage...I am not really sure what an MVR is to be honest , and what is the advantage or disadvantages of it.

    Glen.
     
    Last edited: 15 Jan 2019
  9. Brendan Burgess

    Brendan Burgess Founder

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    You have a split mortgage which is reviewed every three years to see if you need it any longer. Check the terms. I am sure it says that you should advise ptsb if your financial circumstances improve.

    The MVR is just another name for Standard Variable Rate. It can be varied at will by the lender.

    Brendan
     
  10. GlenML

    GlenML Registered User

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    Last edited: 15 Jan 2019
    Thanks Brendan

    My preference would be to stay in my deal for as long as legally possible ( would be happy to leave it for remainder of mortgage term )...pay off the main mortgage on the best rate possible for as long as possible and leave the warehoused amount alone for as long as possible taking full advantage of the 0% applied to it ,and pay it off in a lump sum ( possibly at the end of the mortgage ) the money would be saved monthly along side paying the main mortgage but in a separate account...ie post office.

    I dont feel I am strategically defaulting for example...we have a split mortgage for the remainder of our term as explained in TSB's information above..and yes reviews are conducted but TSB told us they are to see if the split can be reduced as it's in our interest to not have a lump sum payable at the end but the review is not binding...

    We had a review with TSB 2 yrs ago and they calculated that we could up our payments but I wasn't permanent in work and didn't want to commit to the payments they asked for...they said that's fine we didn't have to accept it even though they thought we could afford the higher amount , and that our deal was a split and as I said above they confirmed as long as its payed by the end that's the deal we have entered in to....

    Am I wrong that Pepper will have to do the same as they have to comply with our TSB terms we have..?

    My question is can we do this...no matter the financial review result with Pepper..?

    Thank you again for your information..its much appreciated as we are left in limbo after the transfer.

    Glen
     
    Last edited: 15 Jan 2019
  11. USER1981

    USER1981 Registered User

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    I was also sold from PTSB to pepper. It's a interest part capital restructure. I'm due for review in july should I do another sfs with ptsb and get some medium term security. I assume once I'm paying and haven't missed a repayment in 5 1/2 years there won't be an issue when transferred... I think I be in position later in year to return to full payments. If that's case will it be ok and pepper will continue to take money with no review required...
    I assume once we are cooperating there won't be an issue.
     
  12. GlenML

    GlenML Registered User

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    I really think PTSB should of offered us individual advice before the transfer..I've called them several times and got somewhat different advice of every agent on the phone...
    Its not really good enough as the majority of this transfer have been co operating since split put in place and deserve better clear and concise information on their individual positions.
     
  13. USER1981

    USER1981 Registered User

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    What sort of info are you getting from them.

    Am I right in thinking we should be ok as we were co operating and not to panic. Hard not too when u read some articles... I'm sure people in lot worse positions than ourselves and we have been working and fully paying restructures as agreed
     
  14. GlenML

    GlenML Registered User

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    Basically yes...things should continue as is..for how long I'm not sure though...

    Bank have said we have nothing to worry about as we are in restructures and fully co operating..

    But when rates are up for review will they be competitive with pepper as with main banks and will their financial review be the same as ptsb's...if all is to be the same then surely they will..! , but I doubt it in all honesty..we will no longer be customers of TSB and although our deal is our deal the other aspects of it are up for pepper to decide as far as I can see.
     
  15. USER1981

    USER1981 Registered User

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    Pepper still have to work to code of conduct too though.... so be hoping it be close to status quo. If we did sfs with ptsb before changeover would that lock it down for another 3 years or can pepper do one straight away.

    If for example we went back to full payments could we switch from pepper to say bank of Ireland or someone else or how long before we could look into it.
     
  16. GlenML

    GlenML Registered User

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    Pepper will probably take a while to do every review just depends on where you are on there list..I'd say it will be every 2 to 3 years..but could be every year if they want I suppose..
    A mortgage advisor told me 2 years of full repayments and a show of affordability would open up the market to us with all providers.

    Try get some impartial advice... maybe plan to switch provider in the medium term say next 5 years max...that allows for you to see what pepper intend to do and how they treat us..if all good fair enough.
    Get your house in order before the transfer..that's my intentions.
     
  17. USER1981

    USER1981 Registered User

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    Thanks for reply. Suppose we could be in a lot worse position... as pepper are regulated they wi have to be seen to working with people. I might contact ptsb and do new sfs at least it will see how I'm doing and what I can afford....

    Why were we sold out when prob thousands of other poor people not even engaging
     
  18. USER1981

    USER1981 Registered User

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    Brendan

    Will Bill Pearse Doherty trying to get through effect our mortgages...

    I've sent off new sfs to ptsb so will see what they come back with. Hoping they will let me go back to near full payment. If this is case I'm sure I'll have no issues with dealing with Pepper in future. Would i be correct.
     
  19. USER1981

    USER1981 Registered User

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    22
    Hi Brendan

    Will Bill Pearse Doherty trying to get through effect our mortgages...

    I've sent off new sfs to ptsb so will see what they come back with. Hoping they will let me go back to near full payment. If this is case I'm sure I'll have no issues with dealing with Pepper in future. Would i be correct.
     
  20. RedOnion

    RedOnion Frequent Poster

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    2,681
    No.
    1. It'll never make it into law, and
    2. You mortgage has already been sold, and it can't apply retrospectively.