Northern Rock Borrow Back Facility Change - Warning!

JustKeepSwimming_2

After having read the NatWest thread here I thought I'd check what the borrow back facilities are with NR. I have a Flexi Tracker For Life (85% HWC) with them & have regularly overpaid & then 'phoned up to get some of the overpayments refunded without any problems. It has been great as I'm self employed, so I've used it to "save" for my tax bills etc. & it has worked really well.

But I noticed that the "borrow back" part of my mortgage statement had disappeared on my latest statement. When I 'phoned NR to query this, they said that funds could still be released, provided I completed an "affordability assessment" & could prove that I could still meet my regular monthly mortgage payment & other outgoings. Funds would then be released in 3-5 days, as before. They didn't require any written evidence, just a declaration that could be done over the 'phone, or by post. I haven't done this yet as I haven't got all my accounts sorted, but NR are putting a copy of the assessment in the post to me today.

NR didn't have to inform me of this change (so they say) but have said that if they wanted to withdraw the borrow back facility completely, then they would have to give its customers 3 months notice - the lady I spoke to said there were no plans to withdraw it at the moment.

While I'm OK & can get my overpayments back, I do worry about others who may not be in the same position as me, if their monthly income has dropped. The feeling I got was that if you failed the affordability assessment then you may not be able to claim back some/all of your overpayments. Obviously this is just my opinion, but I think anyone using this facility ought to check that they are still happy with it. If I failed the affordability assessment I'd be screwed, as over £4000 of my overpayments is due to HMRC at the end of Jan.

The NatWest thread is chilling - I can't believe a bank can treat its customers so appallingly & I feel for all those affected. Anyone who has any type of flexible mortgage ought to read it & think what they would do in the same situation.

Dan_1976

It would be a worry for some, then again if income has dropped and they fail the test then they are better off not borrowing it!

Testing times a head though!

silvercar

Dan_1976 wrote: »

It would be a worry for some, then again if income has dropped and they fail the test then they are better off not borrowing it!

Testing times a head though!

You can say they are better off not borrowing it, but this is money already accounted for and set aside. If people knew there was even a 1% chance that they might lose rights to their money they have saved up, they would have put it in a savings account with an unconnected bank.

MBM

have a look at this article, http://www.thisismoney.co.uk/mortgages-and-homes/mortgages-features/article.html?in_article_id=495766&in_page_id=58

Dan_1976

silvercar wrote: »

You can say they are better off not borrowing it, but this is money already accounted for and set aside. If people knew there was even a 1% chance that they might lose rights to their money they have saved up, they would have put it in a savings account with an unconnected bank.

It's not an off set account or saving system its a BORROW BACK facility so it is not their money its Northern rocks.

I said it would be a worry for some, so people using it like the OP will be worried and it could really put a spanner in the works.

However, others who may be borrowing it back for pleasure items or even to supliment income the tighter controls could be better for them.

co123456

JustKeepSwimming wrote: »

NR didn't have to inform me of this change (so they say)

They pulled that excuse on me so I complained to the FOS. Settled for compensation of £250.

I used my NR Borowback to park Stoozed credit card funds so couldn't afford any risk of not retrieving the funds.

db7

cheeryoleary wrote: »

They pulled that excuse on me so I complained to the FOS. Settled for compensation of £250.

I used my NR Borowback to park Stoozed credit card funds so couldn't afford any risk of not retrieving the funds.

I've done the same thing - I've had an interest-free credit card for purchases and in February I will have to find about £3500 to pay it off. Over the last 4 years I've overpaid nearly £20000 on my NR mortgage and I'm going to have to phone them asking for £4000 back. If they ask what it's for I don't suppose "to pay off a credit card bill" will go down well. Anyone have ideas about the best excuse for needing the money is?!

db

co123456

I was never asked for a reason why I wanted the cash back, and I made NR aware of my Stoozing activities. Whether they took any notice is a different matter.

JustKeepSwimming_2

I had the forms through the post a few days ago - most of the questions were concerned with whether there was a second charge on the property, or if I had any BTLs! I had to work out my regular monthly outgoings & give them details of my income from employment.

My circumstances don't look too good on paper as I've been self employed for years, & I turn over less than £20K/year (as I have 2 young children to look after so I don't work much in the school holidays unless my ex has them). As NR can't include my ex's generous maintenance payment as part of my income they did wonder how I could manage on so little money (obviously quite well, or I wouldn't have been overpaying my mortgage for the last few years :rolleyes:)!

However they did agree to release the funds I needed to pay HMRC next month - hit my bank account today!

I will probably put my d/d down to whatever is the required payment & try & save what I was overpaying in a savings account instead! I don't want to risk not getting my own money back again! I'll just have to strong & resist the urge to withdraw it :rotfl:

donstermonster

I am MF with my mortgage which was with NR , I keep the borrow back facility as itis easy and convenient

I use my MF facility to borrow back regularly and always just ring up and money appears in current account a few days later but rang in November for just £1500 towards my new bathroom and had to do the affordability questions. I did them happily and money appeared

They were easy and you do not need to get your accounts in order , they were
how much do you take home each month
how much does wife take home
any loans
any car loans
any credit cards and estoate of balance
did i pay house and car insurance monthly or annually(if annually they do not even want to know how much it is)
How much roughly do i pay for gas and electric

I was HAPPY to answer them as i think it shows NR are being a bit more careful with "Our" money :T

opinions4u

Mortgage lender in "checking the borrower can afford the debt" shock.

Not quite as exciting a headline as "Reckless bank fat cats drive country to the wall" is it?

Responsible and prudent lending can only be a good thing and an affordability assessment makes absolute sense.