Mortgage not what we were sold.

eztiger

I'm not sure if I've just made a mess of this, or if I genuinely have cause to be concerned.

Around 18 months ago we remortgaged to a new provider.

The provider in question has their own branded high street outlets that we went to to discuss the mortgage with.

I should hasten to add they were very clear they could not advise us what product to take, just tell us factually what they offered. I suspect this may not help my cause!

Our key decision boiled down to taking a variable rate or fixing.

At the time the variable rate they offered was attractive and lower than anything fixed in their portfolio.

We were wary of the variable rate for the usual reasons but the person dealing with us assured us that we could change from their variable rate products onto one of their fixed rate products (LTV dependant) at any time with no penalty. Crucially there was *no mention* of any lock-in to the variable rate for a set time period.

I went round this twice with them and they were very sure. We elected to take the variable rate as we could see no reason not to. It was a better deal right then and if rates looked to rise we just changed with no problem. Win win and too good to be true?

Fast forward to now and with the recent independent report suggesting rates might start rising in spring we thought it prudent to look at fixing. The same provider now offers products that, based on our current LTV, offer more attractive fixed rates than our current variable.

Great we thought, we can change with no penalty, fix for 5 years at a good interest rate to duck any fluctuations that might be coming and at the same time the new rate will be better than we are paying now! Perfect all round!

Except a phone call to the lender revealed that actually we *are* locked into to our variable rate until end of 2011. Oops.

I need to go over the paperwork with a fine tooth comb later, I guess my question is :

- At what point do I have ground for grievance?

I have a nasty feeling that tucked away somewhere on the paperwork I've signed it mentions the lock in. Of course at the time with the company representative going through the paperwork the whole point of them being there is to distill the jargon into english for you - which they do and say sign here / here. and that's it done.

If I've signed it saying 2 year fixed, even though I thought based on their mortgage salesman there was no fix - can I wiggle out?

I have no proof they told me this of course. And if the paper is signed it's quite damning.

It's not the end of the world and if I have *signed* to the two year and that all there is to it then lesson learned, my own fault suck it up etc.

However if there is any chance at all that the fact I signed based on what I was advised can affect this then I would like to know.

The current get out clause is 1% early repayment penalty. Which would be £1500. That on top of the arragenemtn fee of £599 to the new product would be the total cost to move. Even that, spread over 5 years, would be worth paying as the new rate is lower by enough we would 'make it back' after a year or so.

But I'd rather avoid the £1500. If I can engage with the provider around the above with a view to moving product but having them drop the £1500 early repayment fee I'd like to pursue as this was what we were originally told we could do. But if it's a case of tough luck, I totally accept that. Although will more than likely look to move to a new provider given I will still have a bad taste about being given incorrect information.

Thanks for any advice.

[Deleted User]

I'm not sure how you could go onto a variable rate with a new provider. This is normally what you go onto after the end of the initial product. Your first mortgage with a provider is usually (in fact, I think, always) a fixed term product these days.

Are you sure you didn't get a tracker, or capped, or something similar?

Cannon_Fodder

eztiger wrote: »

I need to go over the paperwork with a fine tooth comb later...

No, you need to go over your paperwork NOW.

Until you do, there can be no grounds for grievance.

Frankly, if you do not already know what is in the paperwork, then you are on shaky ground at best.

The time to read such documents is before you sign them. Radical though that thought seems to be for so many.

Don't rush into paying an ERC. You could easily get another year out of a variable deal, before rates rise.

betmunch

Heres my prediction.

You will get home and check your paperwork, which will tell you that you had a non-advised sale. Which basically means you choose the product rather then the bank advising you to take it.

I think you have been properly stitched up by the bank.

I hope I am wrong for you sake though

Good Luck

eztiger

Deleted_User wrote: »

I'm not sure how you could go onto a variable rate with a new provider. This is normally what you go onto after the end of the initial product. Your first mortgage with a provider is usually (in fact, I think, always) a fixed term product these days.

Are you sure you didn't get a tracker, or capped, or something similar?

I suspect I'm not using the correct term. I'm calling it variable in terms of its based on some combination of base rate + x%. This may be a tracker but to all intents and purposes to me it's variable as it can change (with 2 months notice according to the docs).

This may not be the correct term so I apologise.

I don't think it really changes the thrust of my query.

eztiger

Cannon_Fodder wrote: »

No, you need to go over your paperwork NOW.

Until you do, there can be no grounds for grievance.

Frankly, if you do not already know what is in the paperwork, then you are on shaky ground at best.

I don't know because I don't have it in front of me right now. I know what I *thought* it said but that's just been called into question.

Cannon_Fodder wrote: »

The time to read such documents is before you sign them. Radical though that thought seems to be for so many.

I appreciate your bluntness and I agree. If it's the case I've failed to do so and that is the end of the matter I can only hold my hands up.

However, in my defence most providers or advisors 'walk you through' the paperwork and explain it to you as they go. You then sign after talking it through with them in english.

Naively I presumed that what they're explaining is the product you're signing to and you should have no need to double check presuming you can even penetrate the small print and myriad of terms in the paperwork. It would probably take me days to go through it all and understand it all, assuming I can. Likely with many phone calls back to the vendor to clarify points. All with the clock ticking.

I would genuinely be intrigued to know how many people seriously do this. Otherwise I see no point in mortgage brokers etc

I would be more wary if it was an independent broker but a mortgage expert in a bank / building society walking you through their own product I would hope should have a larger measure of credibility.

Again perhaps naivety or a plain mistake on my part.

Don't rush into paying an ERC. You could easily get another year out of a variable deal, before rates rise.

I'm not sure any one knows and if we *don't* get another year before rates rise we'll face an increase of an unknown amount in repayments. Despite the picture I may be painting we're not entirely daft ( ) and made sure we can afford this without too much concern.

But I'd rather not if I don't have to. And, as mentioned, all the current fixes in the portfolio are *better* than our current rate. Thus whatever fixed rate product we change to we will save at least £100 per month in payments. (Or, more realistically, we will pay the same in the mortgage as we do now and start to overpay by the £100).

So regardless of rates rising or not our fresh look at their current portfolio shows us we'd better off anyway.

eztiger

betmunch wrote: »

Heres my prediction.

You will get home and check your paperwork, which will tell you that you had a non-advised sale. Which basically means you choose the product rather then the bank advising you to take it.

This is certainly the case. Whether or not this appears in the paperwork I don't know, but I would be inclined to agree with you that it will.

I think you have been properly stitched up by the bank.

This is really what I'm asking.

I'm aware the paperwork is the binding bit, but if you're being assured by a representative that you're getting x but end up signing y...

It's not the end of the world and even with repayment penalties etc over the length of a new fix at the new rate we'd still save money so I could be in a much much worse position.

I suppose it would be fair to say it's only luck that's caused that though.

Good Luck

Thanks!

beecher2

eztiger wrote: »

Naively I presumed that what they're explaining is the product you're signing to and you should have no need to double check presuming you can even penetrate the small print and myriad of terms in the paperwork. It would probably take me days to go through it all and understand it all, assuming I can. Likely with many phone calls back to the vendor to clarify points. All with the clock ticking.

I would genuinely be intrigued to know how many people seriously do this. Otherwise I see no point in mortgage brokers etc

Your Key Facts isn't complicated and has no small print. It should certainly not take you days to go through it - it is a very straight forward document.

I'd never sign a document I hadn't fully read and understood - certainly not for such an important purchase. Treat this as a lesson learned for the future.

eztiger

As an update :

- my partner has checked our paperwork as a matter of urgency which states

"If you switch to one of our fixed rate mortgages in the first 2 years
the ERC(early repayment charge) on part(s)1 and 2 will not apply,
however, set up fees for the fixed rate mortgage may apply"

Which, to me, *is* in line with what we were sold and I thought.

- We called back and spoke to the represantive we spoke to earlier who has changed her tune and hadn't read our file fully before telling us we would be eligible for the ERC earlier. She now agrees we're not.

So we're happy and it turn outs I *did* have more sense than to sign a bit of paper that said otherwise (this surprises me more than anyone).

I should add that I *did* go over the important bits in the 'key facts' document and signed on the basis of that as well as the chat. But as we're all aware there is much more in there that just that.

So panic over, but thank you all for your input. I'm still slightly concerned that the vendor can make this sort of slip up but we're all human and, as my partner pointed out, it's getting close to christmas.

My blood pressure would have thanked them to get it right first time though!

eztiger

beecher2 wrote: »

Your Key Facts isn't complicated and has no small print. It should certainly not take you days to go through it - it is a very straight forward document.

I'd have to disagree. Our current document has a number of paragraphs that I can read any one of a half dozen ways. I would have no idea for sure which way to take it unless I could get a definitive answer from the vendor of the product.

That's only one paragraph that I can think of from the top of my head. I'm sure I could find more instances.

Whilst I'm not the sharpest tool in the shed I'd like to think of myself as reasonably intelligent. Unless you deal with financial matters or mortgages day in and day out there are alot of clauses, terms and abbreviations in there that will mean little to you.

Unless someone explains them to you in English and what they mean in relation to the product. Which is where problems can creep in...

The parts I had trouble reading may be as clear as a bell to you but that's why people exist to talk you through them.

I'd never sign a document I hadn't fully read and understood - certainly not for such an important purchase. Treat this as a lesson learned for the future.

Again, I thought I understood it. But this was called into question.

Me reading something and thinking I understand it - doesn't mean that I actually do. Unless an authoritative third party can back me up, which again, leads to a problem.

It's certainly a lesson learned but I can very easily see why people can fall foul of this. Whether there's anything I can do in the future to make that less likely I'm not sure, but I will certainly try.

And I will reiterate if the answer to all this had been 'You signed a document, it doesn't matter what you were told you signed it your fault' then I fully accept that. Although I don't think anyone has suggested it's as clear cut as that...?