Although new homeowners can no longer access this mortgage deal, flexible mortgages have proved to be a real life saver for existing customers who are short on cash.
Through this deal homeowners are able to use their mortgage to take advantage of a loan facility that enables them to borrow cash – at will – which they then pay interest on using their mortgage rate.
And considering that even today, many mortgage rates are still cheaper than other forms of borrowing; this bonus has helped many property investors to make overpayments on their mortgage safe in the knowledge that they have got access to this money whenever they needed it.
However this has now all changed…
Dubbed ‘Foundations’, the RBS have now sent letters to many of their existing clients telling them that their credit limit has been cut – for many quite dramatically.
Assessing them on their usage of this facility over the last 12 months, those who have barely used this loan scheme have been chosen to have their credit reduced (based on an individual assessment of their credit history).
And this has spelt bad news for many homeowners who were heavily relying on this loan facility to help them get through financial rough patches. Limited on how much they can borrow, over 0.3% of their customers are expected to be affected.
Original Article
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Fraser Stirling, Property Mentor DelegateNo matter what the media wants you to believe, property is still the only investment route where you can benefit from an asset that will NEVER go into zero value. Even when I was university I admired properties ability to withstand the economic elements and stay strong, even when other investment forms faltered or failed. X years on, I am now the proud owner of multiple property investments - one of which earns a passive income of £4,680 and my property portfolio is still expanding. Read more
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