Reasons Why letter

jpakendal

I'm in a position to pay off my mortgage early and have asked the Building Society for a final settlement statement, which they have sent me.

They have also sent me a 'Reasons Why' letter which they say they should have got me to sign when I took the mortgage out 6 months ago and they seem very keen to get me to sign it. They sent it separately but at the same time as the final settlement statement and have phoned me about it since.

The early settlement fee isn't much (£600) but I suppose I'm asking whether I demand that they don't charge me it becuase they didn't get me to sign the Reasons Why letter... I did sign the offer of mortgage letter at the time.

Thanks

John

koexelek

I would not sign it. It's their mistake not getting you to sign it when they should have done.

I doubt if you will get off the repayment charge, as it will no doubt have been mentioned in the mortgage offer, but you have more barganing power without them having a signed reasons why letter.

Basically, you signing the RWL confirms it was all explained, and you understood it. If they explained the early repayment fee, and you accepted that, then fair enough.
But if it was not explained, you MIGHT be able to get them on a technicality

minimike2

There is no requirement for reasons why (suitability) letters to be signed by the client.

The fact that you signed and agreed to the terms of the mortgage means that you are bound by its conditions....the reasons why letter is sent out after the recommendations are made to CONFIRM understanding, not agree it.


Did you say when you took it out that you would be paying it off after 6 months? I assume you also went direct to the bank rather than through a broker?

dunstonh

There is no requirement for reasons why (suitability) letters to be signed by the client.

Correct. Although some salesforces do like their advisers to get customers to sign it. The FSA/FOS wouldnt care if its signed or not. It doesnt even need to be issued in paper format any more. It also ceased to be called a reasons why letter a good many years ago. It was changed to suitability letter and more recently suitability report.

The two events of the charge and the signature are unrelated. Someone has probably just noticed it wasnt signed and sent it to you to.

jpakendal

Thanks for the feedback. It seems quite clear that I'm bound by the conditions that I signed on the offer.

I have had an inheritance come my way which I was not expecting 6 months ago, which is why I opted for a fixed mortgage at that time.

Noz

jpakendal, any reason you need to pay-off your mortgage now rather than wait for your ERC to expire?

jpakendal

Probably because I have to wait 18 months before there is no penaly and there's the peace-of-mind of having paid it off. The ERC is £650 on a £45000 mortgage. The rate is 5.8%.

Do you have any other suggestions / thoughts of what I should do?