Wrong mortgage advice

claire1977_2

Hi all

I am hoping someone can give me a little advice about what to do next regarding an issue with my mortgage please.

Basically we remortgaged 3.5 yrs ago and took an interest only mortgae out. The advisor who came to us was from the company he got the mortgage through. At the time we told him we wanted interest only for around 12-18 months to sort ourselves out financially ( took a little longer) and then we wanted to switch to a repayment. He told us the mortgage he had got for us would enable us to do this by just ringing up and paying a small admin fee.
I rang yesterday to switch and was told that this was not the case and we would have to remortgage which we really cant do as now have CCJ's and the fees would be too much.

I spoke to one of the managers who then said that the advisor had told us that because it is ( switching like this ) coming in in a few weeks even though he had told us this 3.5 yrs ago.

Now am really unsure what to do as we were took this mortgage spefically beacause he said we could switch so easily, now am worried am stuck with an interst only and have no way of paying the capital back as at the time we told him we had nothing in place to pay this and he said dont worry because of changing to repayment this wouldnt be an issue.

Sorry for long and waffely first post am just in a bit of a panic at the moment.

Thanks for reading
Claire

minimike2

That sounds weird....i have never heard of a company not allowing you to switch repayment method.....what company is it?

Also, does your prodcut allow monthly overpayments?

claire1977_2

Sorry didnt realise I could mention names. It is GE money, they said the reason for this is due to the FSA changing rules in 2004 that they couldnt allow us to change because they have to check again that we can afford the new repayment ammounts?? by doing new credit checks and new property valuation and then switching to a completely new mortgage.

There is no facility for overpayments either.

UK007BullDog

Same here.... I dont know of a mortgage that cannot be repayment. Interest only loans make the lender more money as the borrowed amount never reduces. There should be no need to remortgage the whole amount. When is your current deal ending with them? Maybe they are saying as you current deal ends with them anyway in a few weeks you could save yourself the money of going repayment? Because then they would offer you their best deals for existing customers and you can then say you would like to go repayment. That would save you a fee. Plus they might not ask for your current income status or do checks on you, so you might not need to worry about your CCJ's. When is your current deal ending, who is the lender?

Are you sure you explained yourself properly to the person on the phone?

Which company is this?

Are your CCJ's old or fresh? if old go and see a broker to get you a better deal.

UK007BullDog

Hi Claire that sounds like hogwash to me. The overpayment part I can understand. But to change from IO to repayment should be possible with just a fee payable.
They just want to charge a nice fee. As they are a subprime lender anyway you should be OK with your not so good credit record.

I think you should go and see a broker.

Or fix your credit file, save the money in an isa and use it to pay off a lump sum when next remortgaging away.

minimike2

Thats not true about them not being able to change it because of FSA rules. I would call them again!

herbiesjp

Ask them to put it in writing and quote which FSA rule it is

minimike2

Well I just rang them for you to ask..

Was told that if you are within a tie in, then you have to pay the early redemption penalties, but if you are out of your tie in then you can change repayment method and that they dont charge a fee.

To be honest, im not confident that this person was correct. I will call the BDM for you and see what she has to say.

**rang and left a message....will let you know the response**

happybroker

I am looking at "A guide to our fees" for GE Money Home Lending and they have a "Loan Conversion" fee of £100 for switching between Interest Only and Repayment. It would seem strange that they would publish such a fee if they don't provide the service don't you think. Its printed on the back of your statement.

I can understand that they might want to make sure you could afford the new monthly payments and that would be as simple as checking you payslips. No valuation would need to be done and no new credit checks.

Are you ringing the right number, I think if you are inadvertantly ringing the Cornwall office you will be getting a sales team who's job is to get appointments for their advisers.

I would imagine that the loan will be through the Igroup side of GE Money and the office you need to ring is in Watford (sorry don't have the number to hand).

If you can afford it you shouldn't ahve any problems

claire1977_2

Thanks for the replies, our current deal was only a one year discounted rate so ended 2.5 yrs ago. I spoke to about 3 people who all said the same thing - there was no way to change repayment method with out a remortgage. Will phone again and get all the reasons put in writing.
Thanks

happybroker

you will wait for ever and a day for the letter.

Write a formal complaint nd enclose copies of your last 3 payslips.

Quote "treating customers fairly" which is an FSA requirement and tell them in your letter that if they cannot switch you to repayment you require a deadlock letter so you can take your complaint to the financial ombudsman.

Send you letter by recorded delivery and chase them 3 days after they sign for the post, they have 48 hours to respond to your complaint.