Penalties dispute

Blieumo

First time here so i hope I'm in the right thread.

We recently moved house and were tied in with Northern Rock until November 2006. The house we are purchasing is in a state of disrepair but we have the funds, guarantees and time to undertake the necessary repairs. After speaking with Northern Rock they agreed to port the mortgage across to the new property and give us the necessary increase in funds subject to survey. We approached Countrywide Surveyors who proceeded to point out the bad state of the property and give us a value of £0 stating that the property was unmortgagable. The case went to the Northern Rock underwriters who promptly refused us a mortgage.
This action forced us to contact Abbey who proceeded to give us a mortgage after valuation with provision of quotations, guarantees and a full structural survey. A retention was to be imposed until we managed to have the price reduced. All is set to move forward and building work starts in June.

Northern Rock have imposed a fee of approx £5000 for the privilige of refusing us a mortgage as a penalty for being forced to move to Abbey.
We wanted to stay with the company and until this happened were very happy with the product.
Before I start a process of dispute is there anything I can do or anyone I should speak to?

Thankyou
Blieu Earp

silvercar

Northern Rock have imposed a fee of approx £5000 for the privilige of refusing us a mortgage as a penalty for being forced to move to Abbey.

Sounds like you have a NR mortgage with redemption penalties. They will allow you to transfer it to another property that meets their valuation / lending criteria. Should you choose to move to a property that is not sufficient to provide security for the mortgage the redemption penalties will apply.

You have two choices to avoid redemption penalties - stay put or move to a house that has an appropriate value.

You cannot blame NR for refusing to lend against a property with no value. You cannot blame them for keeping to conditions you agreed to.

But you knew all that didn't you?

The moment you approached another lender you knew that NR redemption penalties would apply.

Not what you want to hear I know.

TangentMan

I agree with silvercar. If you are incurring Early Repayment Charges (aka Redemption charges) because you wish to terminate your NR deal early then you have to pay them.

This doesn't really have anything to do with the state of repair of the new property. It is simply down to the fact that the valuation amount of the new property in no way covers the oustanding debt. The same would apply to any move.

dunstonh

I cant see any fault of NR here. Its a case of them applying terms which you agreed to and would have been pointed out to you by a solicitor when you signed the contract (assuming you used a solicitor and if you didn't, then its your responsibility to understand the contract you sign). Sorry.