Mortgage Mess

I'm surprised you were not given the option of making good the shortfall of the missing tax top-ups yourself. I mean it's hardly uncommon for people to work abroad for a while and then return, and retaining (and indeed renting out) their house meanwhile.

You didn't stop making contributions (i.e. paying interest) to the mortgage company, did you? They simply found out you had stopped contributing to the pension and the life companies, right?

Presumably it would be wise for one of those other investments to be a pension elsewhere. But it really doesn't matter. A pension is an investment which is locked in until you retire, you can't fritter it away by cashing it in earlier, like you could other investments.

So presumably they are happy.

That's not a problem unless you want to sell or the lender wishes to repossess if you've been defaulting on the loan.

There will be hell to pay. :-)

The deal between you and the lender is that you must repay the loan when the time comes. The fact that (presumably) the same person who sold you the loan also sold you the pension is purely incidental. There is no assumption that the pension must be the only source of dosh from which the loan is to be repaid, or even that, had you in fact kept up the pension payments, that it will be sufficient.

So really you must look to your other investments to meet the shortfall, and if they too are insufficient, you may need to sell the house then.

Everyone around will fall about laughing.

At the point where you went to work abroad YOU should have realised that you would no longer have a pension and therefore needed to do something about it.

they don't think you should work in the UK for 35 years. They think you should make provision to make sure the mortgage is paid off.

Has the property become run down? Or has the area deteriorated? Losing half its value seems strange.

You were the one who went to work abroad, Was it a company pension scheme or did the mortgage lender sell you the pension?

Did you do the mortgage directly with the lender or through a broker? If through a broker the mortgage company cannot be held liable for any advice.

How did they know?

Sounds like some one grassed him up ;O)

In message , half_pint writes

No they are designed for salesmen to sell and make loads of commission over a huge period of years.

Thanks for all the ideas.

There was tax relief on the life cover and it was tied specifically to the mortgage. The company was required to notify the mortgage company whan I stopped contributions. I am still paying the mortgage interest. The mortgage company, pensions company and the company giving the life cover were three different companies.

I was not given a choice. I was sent "review questionaires" for the pension and life cover which made it clear that contributions could not be accepted from non UK tax payers. I didn't return the questionaires and a few months later I got letters and they stopped taking the direct debits.

There are many reasons why the value of the property dropped. I bought when property prices were high in 1991. The area also got a bad reputation after a murder. It is however a decent place to live. It's modern, 20 minutes walk to the city centre, private parking, secure entry phone and quiet (for a central location). Indeed, we are going back there to live for a few months in September. If I had a few bob to spare I'd certainly consider buying another at current prices for renting.

Thanks again.

incidental.

Yeah, right.

As if ...

I won't.

Ach, away, you doubting Thomas.

Look, bhoyo. Typically what happens is that some salesman (sorry, financial adviser) puts together for the borrower a package consisting of two or three components which are completely independent in the sense that they are provided by totally different companies. The two components are (1) an interest-only loan from a lender, usually a bank or BS, on which the borrower must pay interest but need not repay the capital until after an agreed very long time, and (2) a repayment vehicle or savings scheme, such as in this case a pension, designed to save up enough money to repay the loan capital by the relevant time. The optional third component is life insurance to repay the capital should the borrower snuff it, so that his dependants won't need to worry about being kicked out of the house.

The OP has confirmed that in this case there are three companies involved because he said the pensions and insurance companies told the lender that the premiums have stopped coming in.

As if what? That's what happens. The lender cares only that it will get the capital back in due course, but doesn't care how. It may take an interest in how, just for peace of mind, and so likes to be kept informed, but at the end of the day, it just wants to earn interest and to be sure the money will be repaid in the fullness of time.

Suit yourself. It is funny though how people claim they were mis-sold despite being told in no uncertain terms that there are risks involved, and that having judged those risks to be suitably negligible, but years later realising that they may have built their house on sand, they wish somehow to pin the blame on someone else.