Northern Rock - Is there anything that can be done?

Katieve75

Hello All,

Apologies I'm a little vague on some details here but it's my partner who had the mortgage with Northern Rock so this is all second hand info.

The basics of it are as follows! My partner took out a mortgage with Northern Rock before all the problems. He chose a mortgage that would allow him to increase the amount he could borrow up to the maximum they would allow in relation to his salary. He paid an extra premium for this too!

This year, we decided to move as the house was too small for us. Northern Rock (which is now named slightly differently) told him they would not honour the conditions of the mortgage and increase the amount borrowed. Subsequently, he had to get another mortgage from a different company but Northern Rock, despite not giving him the mortgage they agreed to and that he had paid for, are charging him £3,600 to be released!!!

According to his FA, alot of people have been caught out by this (apologies if I've missed a previous thread!) and there is nothing anyone can do about it - is this so? £3,600 is alot of money to us and I'd hate for him to pay it over with no fight.

Advise anyone?

Many thanks.

beecher2

Sounds like it is the Early Repayment Charge and I can't see that you have a chance in not paying it. There's never a guarantee that a lender will allow you to port a deal over - they're always subject to present day lending criteria. So they've broken no promise, and haven't failed to honour any agreement I'm afraid.

Katieve75

So a lender can state that they will give you these benefits that are in your agreement (such as the ability to increase your mortgage at any point to maximum level), charge you extra for privilege, then simply refuse to honour the agreement? Surely not!

beecher2

No lender would ever say that they will definitely allow someone to increase their mortgage to the maximum level - it will always be subject to present day lending criteria. Otherwise you'd have people who had lost their job being allowed to increase their mortgage.

shortchanged_2

Firstly if nothing else I would look at getting the extra premium he paid for this service as they have breached that agreement particularly if he fulfils the criteria for extra lending. Out of curiosity, how much was this extra premium?

Katieve75

I'm unsure - I'll ask him and post later.

I find it strange that his FA said that others where in this boat too so it's not a one off.

He does fulfil a well known banks critera as he's got another mortgage now to fund the purchase of our new house to almost his maximum level.

Thrugelmir

Katieve75 wrote: »

So a lender can state that they will give you these benefits that are in your agreement (such as the ability to increase your mortgage at any point to maximum level), charge you extra for privilege, then simply refuse to honour the agreement? Surely not!

There's no guarantee as to what a lender may advance at a given point in time. Both criteria and policy are constantly changing.

At the point the original mortgage was obtained it is possible that more money could have been borrowed than originally was. As NR had one of the more lax lending policies. Post financial crash NRAM no longer write new business. Hence why its necessary to remortgage elsewhere.

nicolascowen

Sounds like maybe the original mortgage was flexible and they gave him what he borrowed and then a further borrowing limit, unfortunately this was always going to be subject to current underwriting. N Rock were giving money away hand over fist before the crash with few income checks and not taking all borrowing into account so were a favourite with brokers. The 3600 sounds like an early repayment charge. I'd look carefully at the offer print as this is what your partner agreed to.