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My mortgage with Banco Halifax, allows me to reduce my capital or increase my borrowing to an agreed limit. Banco Halifax was part of the HBOS group & soon to be part of Lloyds TSB.
I will shortly be receiving a substantial sum of €s, that would be required by me in Oct 2009, to fulfil an contractual obligation. I need to park these € until such time and have to make them work. I have two options
1) Leave it on a deposit account & earn low interest, pay tax on the interest & declare on my UK tax etc.
2) Reduce my mortgage by the amount until Oct 2009. This was I will effectively will be earning a higher interest by way of not paying the mortgage on the amount credited to it.
It, seams pretty clear cut to most readers as to what I should be doing. However Bank of Scotland has similar product here in the UK & they have reduced the borrowers limit by stating that as they don’t need the money & have not utilised their limit. The bank has reduced their limit and to increase they have to approach the bank & start the whole paper chase.
I am concerned that Banco Halifax may do the same as part of the group & as such liquidity crises affecting the group. If Halifax takes this action I will not be able to fulfill my contractual obligation in Oct 2009. I have seen the Banco Halifax manager on the subject. He assures me from reading my offer letter that this cannot be done. Under the present financial & other circumstances. I do not have confidence in his assurance.
Any one would like to comment or add their concerns.
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I’m not sure how they will assist but Shakeel, at least you will be boring them, not me with a post that makes no real sense.
Its like ‘i’m coming into some money’ and i’ll make up some gibberish to emphasize the fact and blurt on about a credit crunch situation that i’ve invented in my head.
Either that or you’ve just completely got your knickers in a twist.
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Mary Hinge.
If you think I am boring you. Sorry, if it has nothing to do with LFOs, lawyers etc. Its a very new situation in the financial market. If you lack the capacity to understand. Let me summarise.A lender has given a credit line with flexibility. The line states that its customer can over pay & take further credit up to the agreed limit. In normal circumstances it not an issue. In the current credit crises the banks are behaving in whatever manner it suits them and one has to be careful.
I, am trying to avoid the situation. As, I will need the money in October 2007. I would like to be sure that I can access it.
All, I ask if the forum users have had any similar experience or advise.
Now, you can take an aspirin.
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@shakeel wrote:
Mary Hinge.
If you think I am boring you. Sorry, if it has nothing to do with LFOs, lawyers etc. Its a very new situation in the financial market. If you lack the capacity to understand. Let me summarise.A lender has given a credit line with flexibility. The line states that its customer can over pay & take further credit up to the agreed limit. In normal circumstances it not an issue. In the current credit crises the banks are behaving in whatever manner it suits them and one has to be careful.
I, am trying to avoid the situation. As, I will need the money in October 2007. I would like to be sure that I can access it.
All, I ask if the forum users have had any similar experience or advise.
Now, you can take an aspirin.
October 2007 was over 13 months ago, given you have a need to access money 13 months ago, I would seriously think anyone reading this would think given you can’t even handle dates, perhaps replying discussing theoretical example (which may or many not exist) in the financial markets may be a bit of a waist of time.
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Shakeel
The only way to guarantee the arrangement in many respects would be:
1 To have a word with someone about the legal status of the offer letter/contract or their terms of business. If their terms can be altered under notice then they can do what they want, likely it will depend upon your LTV.
2 Enter an offset arrangement assuming they will allow you.
and this is a matter for a ‘money saving expert’ or ‘consumer advice’ forum as it relates to a money contract/terms of business, namely the contract you currently have with the bank.
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Chilly: In normal circumstances, I would be doing what you suggested. However as the said money is earmarked for another transaction for October09 and with credit squeeze, I cannot take this chance.
The funds mentioned is a loan from a bank, which I am forced to draw down this year instead of October 09. Its not an income, its not a share of El Gordo, or from a inheritance of a long lost uncle.
If the amount is brought into UK or even transacted off shore it will raise suspicion of money laundering, terrorist funding, or even blackmail money from the captives of South American revolutionaries and the Somali Pirates
Being, self employed in the current climate when it is difficult enough to collect my dues from the slow payers. I really don’t have time to deal with inquiries from the parasites of this world.
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@chilly wrote:
Shakeel,
my personal opinion, if i were coming into a large quantity of euros any time soon, i would change them into sterling and wait for the exchange rate to improve and then change them backAre you crazy?
What have you seen happening in the UK right now that leads you to believe that investing in UK plc will be attractive to anyone in the near or mid term future? The UK is in a major crisis already and the recession hasnt even got going yet. Walk up any high street and see the empty stores, pubs and restaurants are closing allover the place and unemployment is rising fast
The Government will start printing money soon because no one will be interested in lending them any and then inflation will take off – result, even worse exchange rates.
Youd be better taking a trip to las vegas and gambling it away -
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Bluechip: Chilly does have a valid point. However it would have been OK if
a) If I did not have to meet a contractual date i.e. October 2009.
b) If there was access to the credit market and at a reasonable rate of interest.
c) In a normal economic conditions one could make or lose a certain amount within tolerance. However in such a market where the BOE will reduce rate on the 8th of Jan & the ECB on the 15th, these seven days can create a problem purely from timing. Besides as we are heading towards zero rate, depression and be printing money & than later be dealing with inflation. I do not see how the market can improve in favour of pound strengthening.
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@chilly wrote:
Bluechip
i believe the exchange rate MUST improve, people are guessing there will be a substantial change as early as March or April (that remains to be seen) but do you seriously think that, thats it now for Pound?I run a successful business, we buy our stock in Euros or dollars and sell in £’s.
Because the UK no longer has any manufacturing base, most of what we consume in the UK arrives in the same way whether its tomatoes from Spain, TV’s from China – pretty well everything is paid for in one of those currencies.
Because of the exchange rate tumble against the euro and dollar, our business costs have increased dramatically in the last few months and we have raised our prices significantly, others where they can will also raise their prices to stay in business. Where they cannot they will either lose money, go out of business or make people redundant.
These price increase must feed through and result in some serious inflation in the years to come, if the Gov start printing money because they have squandered our reserves then we are likely to be heading for a dose of hyper inflation.
I see no reason why anyone should invest in the UK in the foreseeable future, our exchange rate will only improve when investors believe the UK £ will provide a better return for their investment than the Euro or other currencies will.
There is no MUST about the exchange rate reversal, I am extremely pessimistic about the future. -
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As an aside,
at what rate do you think we (the UK) should join the euro?putting aside all the outside factors like our massive debt and impending hyper inflation, what would be the ideal rate for us as a country?
People are saying that we WILL join now because we’re in the pooh, that would be suicide.
one further question to Bluechip, if we were already part of the Euro, how do you think this current crisis would have played out? do you think we would be at the same place? (i suppose we would at least be able to blame the euro for all our woes, well, the euro-sceptics would)
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@bluechip wrote:
I run a successful business, we buy our stock in Euros or dollars and sell in £’s.Because the UK no longer has any manufacturing base, most of what we consume in the UK arrives in the same way whether its tomatoes from Spain, TV’s from China – pretty well everything is paid for in one of those currencies.
.Exactly.. Now consider what that means to UK Plc when Sterling is weak.
1) UK Plc is not significantly affected by imported raw materials costs being higher because we are not a manufacturing economy
2) Selling in £’s is now a lot lot cheaper to those buying when they are converting their currency to £.
So that means what the UK Plc does best (or just simply does) is now a lot cheaper to economies outside of the UK.
People trot out statement about current account deficits, trade imbalance, flight of fund investment outside of the UK etc etc. Under normal circumstances these statements probably have more merit, but these aren’t normal circumstances.
I have my own business and I sell intellectual services. I don’t need to buy raw materials. A devalued sterling will help my particular industry and pretty much all other types of industry that doesn’t take raw materials make them into something and flog then to the UK consumer or World consumer.
My Spanish mortgages have significantly increased, but since I work in the UK the net effect of devaluation is probably beneficial.
Euroland is and will suffer with a strong Euro. Another example, consider you are a Japanese car manufacture with a plant in Euroland and one in Sunderland. Since 70% of your costs are labour which one are you going to close? The one in Sunderland?
The other point of note is that devaluation of Sterling has been deliberate, it hasn’t occurred by accident, it’s has been encouraged by Brown for the very simple fact that we are a service based economy and in the new world economic model it will help the UK weather the storm better.
This is something that I find most commenters on the subject fail to recognise, it is a new economic model. And we are ensuring that the UK is cheaper than Europe
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