Any useful advice on sorting out my mortgage mess please

lavenderlady

Ok long story and every thing is a mess.

I have an offset with Woolwich that is set at .75% above Barclays base rate.

I had a mortgage of around £130,000 and £40,000 saving in a savings pot. Everything going great, over time mortgage reduces down to around £117,000.

Then I buy a house as a BTL. I use all my savings and also open a reserve pot of £100,000. The plan is to decide later what to do with this amount.

So now I have £117,000 mortgage, no savings and a current a/c with a -£100,000 balance.

Then my life spirals and I become a stay at home mum to my terminally ill child. Life goes on hold and I have only one priority.

Fast forward a few years. Life is a b*st ard and I lose my beautiful child. Time to pick up the pieces....

I look at my finances and find my mortgage is now with Barclays and they have closed pots and opened new ones. Also it turns out that the £400 plus that I had set up to pay the -£100,000 loan has gone out of my account and then been credited back. An error that Barclays are looking into but have sort of admitted to.

The worst bit is that my mortgage amount is now £140,000. My current a/c is -£90,000. I made cash payments of over £30,000 into my current account so god knows why my amount is only £10,000 less than it was!

So I now owe over £20,000 more on my mortgage than I used to even though i've never missed a payment.

I am in discussion with Barclays at the moment as to why the money was credited back but its early days.

So now I'm trying to find ways to get back on track.

I have two houses for sale at the moment, once one sells I will use the money to pay off some of the mortgage so I think staying on this offset is a good idea at the moment. The houses are worth around £50,000 each.

I also mentioned in another thread that I have four BTL's that have only five years to run on them and have a combined amount of £30,000 owing. They are on a SVR of 4.99% at the moment so I think its a good idea to pay these off with money from my reserve pot as then I'll only be paying 1.25%. I shall continue paying the original payment so that should hopefully chip away at my total amount owing.

So thats it. I'm feeling very weak and want to run away from all this but I have to sort it.

Any tips would be helpful. Please don't tell me I should have kept an eye on my finances. I do know that but in the circumstances, life becomes a bubble.

At this moment I am just sorting my statements out into yearly piles to see just why everything is so bad. I think there is so much work ahead of me. Even the people at Barclays I spoke to have had to go away and see if they can sort out whats going on. I'm waiting to hear back.

So if anyone can give me any pointers, ideas that may make this period a bit easier to understand then please let me know.

Thank you for reading this.

Robert_Sterling_3

I am not able to help you myself.
I am sure others will be able to help you.
I hope things will pick up for you soon.

Trying_to_be_good

Sorry to hear of your difficulties, and well done for trying to sort out the finances now. I have my own bad experiences with Barclays/Woolwich, so would recommend you get out ALL the paperwork you have, and as you've already started to do, put it all in date order.

I'm confused about a few of things:

1. You offset mortgage was at £117,000 at one point, but you say now it's gone up to £140,000 - did you remortgage to increase your borrowing? How did the increase happen? Have you been making a monthly payment on this mortgage? Is it on a repayment basis, or interest only?

2. Was the £400 per month payment made from a Barclays account or somewhere else? If it was (due to Barclays error) recredited to the original account, does that mean it's subsequently been spent, or is there a lump sum sitting somewhere?

3. You mention 4 BTLs - is the total amount outstanding £30,000, or is it £30,000 each? Are these gbenerating a profit/covering the costs/making a loss?

Most importantly, don't trust anything Barclays tell you - make sure you have your paperwork in order. Create (or get from this site) spreadsheets to track what you owe, what you've paid, and interest accruing on your mortgage(s).

lavenderlady

Many thanks for your reply, its appreciated.

Right as for answers.

1. No I didn't remortgage. I honestly don't know whats happening with it at this stage. I'm awaiting for Barclays to investigate. The first £70,000 is interest only, the rest re-payment. Yes I've been making the payment that the bank asked for, ie they changed it when the interest went up or down. I have never ever missed a payment.

2. The payment of £400 was to cover the new -£100,000 loan pot. It was supposed to come out of my current a/c and be paid off my loan pot. However it seems that it just dissapeared for a couple of days and then got put back in my current account. The -£100,000 loan pot was interest only as I intended sorting it out to a loan or whatever. Both these accounts are under the the same offset umbrella so the money is still classed as there, how can it go up!

3. I own five properties. four are only little things worth approx £50,000 each. The fifth is the one I purchased with my savings and the £100,000 loan pot. That one has a lovely tenant in and the rent just about covers the costs. Two of the properties are empty and are for sale so no income on them. The combined amount I owe on the four BTL's is £30,000. I pay £550 a month as a total for the payments. I thought if I pay them off with £30,000 from my mortgage loan pot then continue to pay the same monthly payment of £550 I would be overpaying approx £300 a month so that would chip away at my big mortgage. It would however mean another loan pot Still it seems a start in banging down my owings.

ETA that the £30,000 I put in wasn't in long enough to make a difference as it was taken out so that bit won't make a difference.

Trying_to_be_good

3. I'd be nervous about increasing the loan reserve pot/adding a second until I knew a bit more about what was going on. That's aprtly fed by my Barclay's paranoia, though. If you are sure it's on the same +0.75% rate, it could be a good thing, but it would mean that the borrowing is secured on your main home (I'm hoping you own six properties, of which five are the BTLs?). The more realistically (lower) you price your properties, the more likely they are to sell. Selling costs etc can be offset against letting income. Interest on the loans is also set off, whether the mortgage is on the BTL or the equivalent amount in the reserve pot.

2. Still confused - is tehre a pot of money of £400 times how ever many months the payments have been being messed about? If so, it's less worrying than if the money's been mistakenly spent and now needs to be found. Obviously it would still be frustrating that Barclays have got this repayment wrong and messed it about.

1. Really need to get into the detail of what the balances and details are on the annual statements to try and work out what's happened. Do you do spreadsheets? It'll be the easiest way to try to understand the history. If you want to PM me the details, I have a bit of time this afternoon to play with a spreadsheet if that would help.

lavenderlady

I agree with you entirely about adding another pot to this mess. But yes I am sure that the rate would be only .75% above BBBR so it would see a considerable saving to my account by continuing to pay my original payments of £550 a month. I shall wait a few more days to see whether Barclays come back to me with answers before going ahead with the BTL moves.

No there is no 'saved' pot of money that includes all the £400 amounts that didn't get paid off. They simply went back into my current account and were absorbed.

No I have no spreadsheets or anything. Honestly I'm sat here surrounded by statements spanning the last few years. If Barclays don't ring back before 4pm I shall ring them again.

Two things making this far more difficult. One is the fact that Barclays took over from Woolwich and twice closed down loan pots and put the money elsewhere under the umbrella so whilst I still owed the same, it was difficult to see just where accounts were reducing/increasing. Secondly, we had a downstairs bedroom built to make life easier with wheelchairs and things and money was taken from the account in dribs and drabs to pay the builders etc. Then over the year I put in approx £30,000 cash to pay for the bedroom so again amounts go up and down.

What a mess

Trying_to_be_good

Take your time, make sure you have lots of cups of tea and biscuits to keep you going. You will get it into some sort of order, then we can help.

Conrad

Sorry for your terrible loss.

Just a quick couple of pointers really.

1) Send your complaint letters to the senior compliance officer (they will have one) and if need be a copy to the MD, for thier eyes only and always by recorded post. Make sure the compliance officer knows you will involve the MD and refer to the MD by thier name - this lets the C/O know you are not someone to be fobbed off.

Try and use bullet points not long sentances

Use dates

As far as possible keep it objective and factual.

I always look for the marketing slogan of the organisation and repeat this back to them in the letter. So for example HSBC say they are the worlds local Bank - so when they wont let me ring my branch and put me through to India, I always remind them of thier marketing slogan promise.

I'm a bit of a past master at this sort of thing - I got £1000 cheque from BT by using this method recently - and all it was was a service issue.

If you are not satisfied take it to the regulator.

lavenderlady

Hi Conrad and thank you.

I shall print off your reply to help me get everything together.

At this stage I don't know what i'm complaining about. I think that this would'nt have happened if Barclays had used my payment to pay off the -£100,000 pot instead of crediting me it back every month.

That way the -£100,000 would steadily have come down and not as much would have been offset onto my mortgage account. But good grief if this is the case then its caused a hefty hike in what I owe!

I've just rang Barclays but the person dealing with me has gone off sick.. I've sat by the phone since yesterday! Someone else is going to ring me back because I need some answers, otherwise its a long weekend!

lavenderlady

So it gets to 4.45pm and still nobody has rang. I ring back only to be told that the guy who should have rang me has gone home for the day.

Back in December Barclays assured me that they would change my monthly payment to an amount that would stop any more monthly interest being added and yet I find on my Jan and Feb statements that approx £250 in interest has been added to my balance.

I've been ringing them on and off since last year trying to sort this out. Each time I've not been able to get passed the Indian call center who are very lovely but tell me they are able to sort it out. Twenty minutes later when they realise that they can't and they finally agree to put me through we find the number is busy so someone will ring me back. Most times they don't and then another month passes before I get the strength to try again.

Today I flipped and told them that this situation is worrying me to the point I can't sleep and now I have to face the weekend without knowing whats going on. I burst into tears and told them they can't do this to me anymore. The fantastic manager I spoke to said this has gone on long enough and has ordered a full enquiry of my account.

Hopefully it will now get sorted soon and I can start a plan to help me reduce this loan. However in the meantime its still going up. I believe they will have to refund this though because they sent me a letter saying that they have amended my payments as I requested. As I mentioned before, its not enough.

SouthCoast

Your accountant/financial adviser will be able to sort things out for you.