Northern Rock...downright sneaky tactic.

lethal0r

happybroker wrote: »

Wow....I don't think that there is an adviser on here who would think that a borrower being mislead is acceptable

http://news.bbc.co.uk/1/hi/business/7519755.stm

minimike2

"Of these, 24 were banks or building societies, 13 were estate agents and 13 were independent mortgage advisers"

Lets assume worst case that none of the independent mortgage adivsers were one of the 4....do you think that means all 13 post on here?


To sample 50 gives no clear indication of the real picture.

Madjock

I don't know why it astounds me how arrogant people are. The information about the cashback was on the KFI AND the offer. You don't have the time/inclination to read and digest all of the information? Who do you suggest should do it? It's your mortgage and noone else's.

No, I'm not a broker.

Ian_Griffiths_Halifax

As a broker, whenever I helped a client to arrange a Northern Rock mortgage (I don't SELL mortgages, I help them to arrange the right one for them), I pointed out if there was an extended penalty period on the Help With Costs Option.

It was an Option not an obligation to take the Help With Costs (not Cashback) and if the client didn't want it then they didn't have to take it.

I didn't like it when NR started doing this, but again, it was an Option.

I made it quite cliear to my clients and told them,

"It is highly likely that you won't want to keep the mortgage after the deal comes to an end and if you take this Option it will help you to pay such as Legal Fees and give you money back to cover such as the valuation fee you will have paid out, but when you come to the end of the (say 3 year fixed) deal, you will still have a 6 month penalty on the Help With Costs. The options available to you at that point will be, stay with NR for another 6 months until the penalty ends, or, pay them the Help With Costs back and treat it as an interest free loan for the next 3 years".

Some took the Help With Costs and some didn't. Pretty much like some people will take a deal with Redemption Penalties, willing to take the risk that they will need the mortgage for that period, and some will take a higher interest rate deal with no penalties as they don't want to commit.

I haven't seen ANY condecending posts on this thread by Brokers. They have simply NOT given the 'sorry to hear your story' responses that many threads receive.

I don't think there's anything wrong with brokers supporting what will have been put into at least two documents (the Key Facts Illustration - KFI and the Mortgage Offer Letter) before the customer was committed to taking the deal.

If you read it and were concerned about the extended penalty on the Help With Costs at the time of the application, you should have asked your broker to explain it more.

DaftMule

Madjock wrote: »

I don't know why it astounds me how arrogant people are. The information about the cashback was on the KFI AND the offer. You don't have the time/inclination to read and digest all of the information? Who do you suggest should do it? It's your mortgage and noone else's.

No, I'm not a broker.

I certainly didn't intend to sound arrogant...and apologise if that is how my OP came across.

Whilst I accept the points made by many of the advisers here that the information was there (I checked through the paperwork last night and it is there in the 8 or 10 pages of KFI info) and can also accept that there is a responsibility on my shoulders to understand what is being offered before signing, I am not a financial expert. As such, the various permutations and potential outcomes resulting from the offer on the table are not obvious. If they are not obvious, how can you ask the right questions?

I took out the mortgage through an independent adviser. Someone in a previous post said that it is up to me to ask the adviser if I don't understand some of the details. Well, if a detail such as the discrepancy between the redemption periods between the rate and the cash-back incentive is not something that leaps off the page as a potential problem to me, I am not going to ask the adviser to clarify am I.

At the end of the day, I am hopefully wiser for the experience and so I can approach my re-mortgage with a better defence against the tactics employed by lenders in their deals. It's an expensive way to learn though. As pointed out, this is the single biggest financial contract anyone is ever likely to be personally involved in and so the consequences of not being armed with a full understanding can be expensive.

It seems to me that the only way to approach a mortgage transaction is to assume that any deal or incentive being offered is NEVER done for your benefit. It's done for the benefit of the lender...obvious maybe but perhaps worth saying. Assume there is always a catch to what is being offered and keep hammering at your adviser to tell you what it is until you feel you have a satisfactory answer. At the end of the day, a mortgage adviser is only human too and as such they cannot be relied upon to know/provide all the answers.

MRSTITTLEMOUSE

We took a two year deal with help with costs with Northern Rock.It was made clear that the time period for repayment of the HWCosts was 12 months after the fixed deal finished,even if we stayed and took a new deal with them.

Dan_Collins_2

I have my own mortgage with NR, I took my first pre FSA and the HWC option was made very clear and clearer when I purchases again after the FSA.

This sounds a little harsh, but people hear a grand for nothing and the rest just dont sink in. Seen it to many times.

I would say that NR have changed the period a few times but it is always clear on the offer and KFI.

kennyboy66_2

minimike2 wrote: »

Incorrect kennyboy. The reason for the huge choice is to attempt to cater for all quarters of the market. Whats right for one isnt for another. Choice is required so that people get a fair deal that is right for thier own needs and circumstances.

look at the current situation....limited numbers of mortgage products.....its an even WORSE time for cosumers to find the best mortgage for them when the choice is samller.

The reason this is "sneaky" is that is that they have slightly different redemption periods on the same product. The headline grabbing £1000 is probably worthless on a mortgage of any more than £200k (if you compare NR SVR rate against say Nationwide, and has a negative value on higher mortgages. Of course no one can predict a lenders SVR rate differential against other lenders SVR rate 3 years hence it is impossible to compare exact costs over 3.5 years.
It is clearly & cleverly designed to trap people.
Do you really think this product added any extra choice ? I would argue that the £1k was purely a marketing tool to attract business.
Whilst there is nothing wrong with that, it is disingenuous to suggest that many of the products over the last 5 years add real choice.

Self cert mortgages, sub prime mortgages, interest only mortages all add choice. Whether they were a good idea for a substantial portion of customers who took them is debatable.

Of course its a worse time to buy a motgage - but for 90% people that is because rates & margins are higher. Not because there are only 1500 products out there rather than 4000.

minimike2

Lets agree to disagree eh.

dunstonh

The headline grabbing £1000 is probably worthless on a mortgage of any more than £200k

You should know Kenny that people on this site get excited if they make 10p saving.

Many only look at the immediate gain and not the long term gain/loss of their actions.