The small print in mortgages (esp Halifax)

firsttimehomeowner · 3 March 2010 at 4:20PM

I am writing this post as a warning to anyone who is either getting their first mortgage or renegotiating their current mortgage. We recently re-negotiated and didn't think about the small print about Early Repayment Charges nor to triple check the length of the mortgage.

When I was negotiating the new deal with the apparently wonderful Halifax - let's just say I have a few rude words to say about them and their latest advertising campaign.... they made out like they were being as helpful as pie, but now the aftermath is costing us a fortune.

When I was negotiating with the lady on the phone, I asked for a 2 year deal, during the calls she quoted many rates, costs etc to me, then finally we agreed on a monthly payment that was affordable. When the paperwork came, we checked the numbers added up, but didn't read the smallprint with a fine tooth comb.

We are now in a position where we either need to sell or rent out our flat, so we did what you are supposed to do and went to the supposedly lovely Halifax to ask them for permission to rent, they asked why, I told them about my sick grandparents and needing to be back in NZ to support my mother and what did they say... We will only give you approval to lease your property for 6 months!

I went back to them and pointed out that no one would rent a flat for less than 6 months, so they agreed to move it to a year with no option for renewal!:mad: This isn't the nicey, nicey, helpful image that they portray on their current ad campaign.

So what this has meant is that we had to try and sell our house in a flat market. We have had an offer, but then after reading that small print, have seen that we have to pay back an Early Repayment Charge of £6,500!!! and that the agreement is for 3 years not 2!

This means that we will lose money on our house and are feeling very bitter about the whole situation.

So the moral of the story. Don't trust your bank, especially Halifax. They are not nice and are out to screw you for every penny they can.

ILW · 3 March 2010 at 4:36PM

It amazes me that there are still people around who think that a bank is anything more than a business, whos main priority is to make as much profit as possible. Have you been living on another planet for the last 30 years?

firsttimehomeowner · 3 March 2010 at 4:40PM

Wow, I would think myself a pretty savvy shopper. But I have always found banks that I have dealt with in the past to be very helpful and not out to get every penny they can from you. I just wanted to share my story so if I can help someone else from making the same mistake I did, then that will be a good thing. Judging by your profile name you are a very savvy individual who probably scrutinizes the fine print - and if that is you - I wish I had been as savvy. Now I will be.

ET1976 · 3 March 2010 at 4:49PM

Appreciate what you're warning people about, but really, ERCs and the term of the deal are 2 of the major, obvious things you should be checking out when getting a mortgage as a matter of course! That's not really small print IMO, it's a basic, critical part of the deal.

firsttimehomeowner · 3 March 2010 at 4:56PM

Sounds like I was a bit of an idiot then. I have learnt my lesson.

firsttimehomeowner · 3 March 2010 at 4:57PM

I wish I had you guys around when I was negotating the mortgage :-)

firsttimehomeowner · 3 March 2010 at 5:11PM

Just thining about it, I still think that it is really upsetting that Halifax woulldn't let us rent out the house for longer than a year. We don't want to sell, but because of their stubborness and unwillingness to agree to a longer term, we have been forced into this situation. Why is it that they don't want us to rent it out? What's the difference to them? They would get their money either way?

Cornish_maid_3 · 3 March 2010 at 6:16PM

I just wanted to say that we had a similar experience with the Halifax, albeit just over 10 years ago. I had moved out of my flat because I had been mugged 3 times in 3 months and was frightened to live there. I moved in with my then boyfriend and we did what we thought was the correct thing and approached the Halifax. They told us we couldn't rent it out at all. Luckily for us, I was offered a job abroad and once I went back to the Halifax with that news, strangely they were very happy for me to rent out the flat. Just didn't make any sense to me.

firsttimehomeowner · 3 March 2010 at 6:25PM

That is really interesting? But is makes me wonder why they would say yes to getting a job abroad versus family being sick and needing to be there for them? How did you word it to them when you were explaining that you were going to take the job overseas... did they not say that they would prefer you stay in the flat and get a job in the UK? I wonder if I could say that because of the economy and needing to go over, I will have to work in NZ and would not feel comfortable accepting a job if I knew I would be in it for less than 12 months... I wonder if that would work?

Fire_Fox · 3 March 2010 at 7:56PM

You are coming over like a petulant child. Income from tenants is far from guaranteed, if you think that you are better off not becoming an accidental landlord. If you are in the UK it is a lot easier for the lender to chase you for mortgage arrears than if you are not based in the UK. DO NOT lie to your lender, the lender is simply expecting you to adhere to the legally binding contract you signed not being 'stubborn'.

firsttimehomeowner · 4 March 2010 at 10:40AM

It's funny, this was my first time in a forum, and to be honest I'm not sure I like the tone of your response. I thought forums were places where people are there to offer advice and help, sharing experiences and aiming for a more positive result. I didn't think that I would come here and be called names that infur I am stupid, had my head in the sand or acting like a child. I am open to advice, but name calling should be left in the playground when you are five years old.