Help with mortgage ending soon - probs with Nationwide.

aimingforadebtfreelife

Hi all, any advice greatfully appreciated.

My parents are coming to the end of their mortgage term (next March). They are currently on interest only and owe £20k on their house valued at £200k. They are both semi-retired. They have a couple of loans secured on the house with Nationwide as well and these are due to end in March. It was their intention to go back to capital repayment next March using the extra monies freed up by the loans being paid off. They saw the girl from Nationwide and an extension of 7 years was agreed as this would see them to the end of their working life and the mortgage would be paid off.

This was 2 weeks ago. They have now had a letter from Head Office to advise that because the original mortgage was taken 40 years ago they will not authorise the extension as their poilcy is rigid - they will not take a mortgage over 40 years in total.

What options are there? Could the £20k be turned into a secured loan? Their age will be against them but I could act as a guarantor.

Many thanks in advance.

opinions4u

How old are they?

Remortgaging elsewhere would seem to be a sensible idea.

GMS

You say a 7 year term would be sufficient and take them to the end of working life. If this is to age 65 then there should be options. If 70 years of age should still be some options.

A remortgage would seem the most appropriate solution and more fool Nationwide turning away customers of 40 years.

A broker would be able to look at all options for this.

magpiecottage

You have not explained why they are on interest-only, which leaves us speculating a bit. Is there an endowment shortfall or something.

Unfortunately, that moronic Bank Manager from their adverts now seems to be running Nationwide and they are taking a "Computer Says No" attitude.

Having said that, Nationwide seems so incompetent that if they just shut up and keep paying the interest, I doubt they will actually notice.

Even if they do, it if they made a threat to take possession, a regulated complaint could be made in response at that time (provided it was done quickly). Once that happens, they must deal with the complaint (up to eight weeks) and if the outcome is not satisfactory the complaint can be taken to the Financial Ombudsman Service and, if necessary, to an Ombudsman (rather than just an adjudicator who might simply side with Nationwide).

The Ombudsman might also side with Nationwide but if the interest is being paid, along with overpayments to reduce the loan, using money available because the other loan was no longer being paid, it seems unlikely that he would sanction a course of action which might render them homeless all for a debt of £20K.

A remortgage is an option but there would be legal and other fees which might make it unattractive.

Thrugelmir

magpiecottage wrote: »

You have not explained why they are on interest-only, which leaves us speculating a bit. Is there an endowment shortfall or something.

Unfortunately, that moronic Bank Manager from their adverts now seems to be running Nationwide and they are taking a "Computer Says No" attitude.

Having said that, Nationwide seems so incompetent that if they just shut up and keep paying the interest, I doubt they will actually notice.

Even if they do, it if they made a threat to take possession, a regulated complaint could be made in response at that time (provided it was done quickly). Once that happens, they must deal with the complaint (up to eight weeks) and if the outcome is not satisfactory the complaint can be taken to the Financial Ombudsman Service and, if necessary, to an Ombudsman (rather than just an adjudicator who might simply side with Nationwide).

The Ombudsman might also side with Nationwide but if the interest is being paid, along with overpayments to reduce the loan, using money available because the other loan was no longer being paid, it seems unlikely that he would sanction a course of action which might render them homeless all for a debt of £20K.

A remortgage is an option but there would be legal and other fees which might make it unattractive.

Interesting views from someone "qualified" to give advice.

I'm not sure describing Nationwide as "Moronic" nor advising an individual to file a complaint when they are in breach of contract is particularly constructive to anyone. Suggesting that the Nationwide won't know when the mortgage is about to end is bordering on sheer ignorance as well.

For the record. I don't work in the Financial Services sector. So have no vested interest.

opinions4u

Thrugelmir wrote: »

I'm not sure describing Nationwide as "Moronic" nor advising an individual to file a complaint when they are in breach of contract is particularly constructive to anyone.

I read the post as describing a character in an advert as moronic.

While it sounds like the customer has a degree of negligence in this case, I suspect the FOS would rule in favour of the customer if a complaint got that far - unless there is something in the circumstances that we have not been made aware of. Nationwide's approach is, on the face of it, aggressive. I wonder if their 2.5% SVR is the reason for their desire to enforce the term?

Thrugelmir

opinions4u wrote: »

I read the post as describing a character in an advert as moronic.

While it sounds like the customer has a degree of negligence in this case, I suspect the FOS would rule in favour of the customer if a complaint got that far - unless there is something in the circumstances that we have not been made aware of. Nationwide's approach is, on the face of it, aggressive. I wonder if their 2.5% SVR is the reason for their desire to enforce the term?

If thats the case. I withdraw my comment.

There's nothing to stop the customer from remortgaging, and the Nationwide wishing likewise in line with your comment regarding the SVR. As the mortgage term has run its natural course.

Fairly strong to say that Nationwides attitude is aggressive. As it would appear that the "customer" has been servicing other secured loans. To the detriment of being able to repay the mortgage by the contractual end of term date. So there's more detail to this case.

aimingforadebtfreelife

Many thanks for the advice and comments.

My parents are 68 and 64. Like all good parents they helped us out a lot financially and took on extra borrowing through add ons to the mortgage. When my dad's health went downhill 5 years back and cut back his hours they got all 3 sons together to say they are going interest only and that when the house is left to us there will be £20k o/s as the other loans will have got paid off. They were led to believe by Nationwide that as long as they paid the interest it would run as long as they wanted.

As the official mortgage term expires next year the meeting they had resulted in them being given an extra 7 years (till my dad is 75 years). The letter they had from Head Office was a computer generated letter saying its not possible and to go back to branch. After a couple of phone calls to Head Office today my dad got nowhere, every person he spoke to said it was daft why it couldnt be allowed especially with 10% LTV and that the branch manager could over rule the decision. So a branch manager can overule a Head Office rule - which is now 40 years maximum mortgage term or reaching the age of 75, whichever is soonest. ????

I'm tempted to say to my dad to write a letter saying will pay the SVR rate each month and if they want to take it further than try!!

They havent missed a payment in nearly 40 years!!!

silvercar

aimingforadebtfreelife wrote: »

Many thanks for the advice and comments.

My parents are 68 and 64. Like all good parents they helped us out a lot financially and took on extra borrowing through add ons to the mortgage. When my dad's health went downhill 5 years back and cut back his hours they got all 3 sons together to say they are going interest only and that when the house is left to us there will be £20k o/s as the other loans will have got paid off. They were led to believe by Nationwide that as long as they paid the interest it would run as long as they wanted.
..............

They havent missed a payment in nearly 40 years!!!

So much for loyalty being rewarded.

Given that there are 3 offspring, could you all not club together, raise 20k and pay off your parents' mortgage?

Thrugelmir

When my dad's health went downhill 5 years back and cut back his hours they got all 3 sons together to say they are going interest only and that when the house is left to us there will be £20k o/s as the other loans will have got paid off. They were led to believe by Nationwide that as long as they paid the interest it would run as long as they wanted.

At face value. The Nationwide are not being repaid as other secured loans have been received preferential treatment, i.e. repayment. If the other secured loans had been defaulted on, your parents would have lost their home.

Agree with Silvercar. As the "family" knew 5 years ago about the situation. Something could have been started then to assist. However small the gesture. Would have saved your parents a lot of unneccessary worry now. Blaming the NW now does seem harsh as they've actually done nothing wrong.

getmore4less

The time to extend was 5 years ago when the replanning was done this would have highlighted the 40y issue and a new 12 year loan would have done the job.

I am supprised people think that just paying the interest gives you the right to an indefinate loan.

If it does then I think a lot more would be taking that option.