I am all for government intervention at certain levels, but get annoyed when it gets involved with the advice side of things like the advocation of long-term fixed rate mortgages. Was Darling a broker in a former life?
I, for one, am not an advocate of long-term 10, 15 and 20-year terms. People’s lifestyles change a lot more now than they did 20 years ago.
Unfortunately we have a high divorce/separation rate and people move a lot more. I think if more people entered into long-term deals there would be a lot of lenders rubbing their hands at the chunky early repayment charges (ERC) they can levy.
The person may not be able to raise capital to pay the other out, there may not be enough equity, the lender may have changed their criteria; there are lots of reasons.
Would it not be fairer to force all lenders to offer one product in their range which was capped and thus give the public more choice? Capped mortgages are rarely available now because the lenders cap them so high.
What if the government said that if you enter into a fixed rate mortgage for five years or more and the Base Rate dropped by more than 1 per cent the lender had to reassess and offer a new rate without charging an ERC?
This is a tall order to ask I know, but my point is Darling just wants to be seen to be concerned by dipping his toes in. If he wants to get involved, then grab the bull by the horns give the FSA a kick up the arse and ask it for some input – or is it too busy trying to make sure we all treat customers fairly?
We are tightly regulated and receive a lower than average number of complaints as an industry. A damn site less than estate agents who dont even have a regulator.
I am not having a go at estate agents, as most are okay, but we all know the stories over more recent times of some insisting certain mortgage brokers or valuers are used, and builders/incentives and gifts.
Surely an over inflation of a property value could have a worse outcome than not being able to afford the mortgage. With the latter you have the option to sell, with the first if you are in negative equity you are faced with a debt.
Who is more at fault, me for getting the mortgage or the agent/valuer for the exaggerated valuation? I know who the FSA will come after – don’t you?
Kind Regards
Nigel Pamment
Inspirational Financial Management Ltd
