Bad advice from Halifax re Extending Mortgage Term

debbyog

We purchased repossession and literally it had nothing not even a kitchen sink. When we ran out of money for the renovations and I had some health problems we arranged an interest free period on our Halifax 5 year fixed mortgage.

After 12 months I spoke to them again to talk about extending this for a further 6 months period. The Halifax agent advised me that to reduce the amount of the monthly repayments at the end of the 6 months I could probably extend my mortgage term by 5 years. I am 51 and my partner is 37 so our term has only 13 years left. A monthly figure was worked out which was around the original payment when we took the mortgage out. I ended the conversation feeling reassured that we would be able afford the full repayments when they started again.

I called them last week in plenty of time to discuss this and was told the maximum time I could extend the mortgage was 2 months! This meant the payment when we return to a repayment mortgage in May would be horrendous. I was then told that because we were marked as being in financial difficulty they could not discuss any other options. Before they could help us our only option was to pay £5k up front to break the deal.

I am going to write a letter of complaint and am tempted to contact the ombudsman.

To add insult to injury the Halifax operator's final words to me where 'never mind something will come up'. I may lay awake dreaming about lottery wins but I was expecting and more professional level of advice from him.

Anyone have any advice?

Deb

opinions4u

debbyog wrote: »

We purchased repossession and literally it had nothing not even a kitchen sink. When we ran out of money for the renovations and I had some health problems we arranged an interest free period on our Halifax 5 year fixed mortgage.

I assume you mean interest only.

After 12 months I spoke to them again to talk about extending this for a further 6 months period. The Halifax agent advised me that to reduce the amount of the monthly repayments at the end of the 6 months I could probably extend my mortgage term by 5 years. I am 51 and my partner is 37 so our term has only 13 years left. A monthly figure was worked out which was around the original payment when we took the mortgage out. I ended the conversation feeling reassured that we would be able afford the full repayments when they started again.

The key word is "probably".

I called them last week in plenty of time to discuss this and was told the maximum time I could extend the mortgage was 2 months!

I am going to write a letter of complaint and am tempted to contact the ombudsman.

While you should pursue your complaint, it isn't about the person who said that they would probably be able to extend the term for longer. That conversation is clearly no guarantee of anything. Your complaint needs to be along the lines of lack of flexibility on their part.

The problem is, if you've been struggling to pay the mortgage now, they have concerns about how you will repay the mortgage when you're 67. The regulator has effectively told lenders to go beyond retirement ages for exceptional reasons only.

You've gone through an extended period of time when you haven't been able to afford the payments. You want to extend the term in to retirement age. What happens when you next hit payment difficulties? Will you be able to recover then?

One option you should seriously consider is whether you can really afford the mortgage. If not, sell up and downsize.

dunstonh

I am going to write a letter of complaint and am tempted to contact the ombudsman.

The ombudsman wont be interested until you have made a complaint first and exhausted the complaints process.

To add insult to injury the Halifax operator's final words to me where 'never mind something will come up'. I may lay awake dreaming about lottery wins but I was expecting and more professional level of advice from him.

They don't give advice. So, don't interpret it as such.

I am struggling to see any wrong doing here. You were not told you could restart it and you were aware of the increased cost you would have when you did. You thought that increasing it may be an option and it may have been and may still be (with another lender). However, Halifax no longer wish to extend the mortgage because they deem it too high a risk. That is not something the ombudsman can force them to do as they do not get involved in commercial decisions.

If you have a pension, you could always use some of the lump sum from that on maturity to pay the outstanding balance.

judy2357

Im not sure if I have got this right but if you have 13 more years on your mortgage that would take you up to the age of 64. I suspect your age is something to do with them refusing an extension. Could you perhaps ring back and enquire if they would grant it if you were willing to have a medical or take out different insurance or something. Sorry Im not sure what would be involved but can vaguely remember this being said to me in a similar situation with the Halifax.

SouthCoast

Having problems with your mortgage payments?

http://mortgagehelp.direct.gov.uk/default.aspx

Thrugelmir

debbyog wrote: »

We purchased repossession and literally it had nothing not even a kitchen sink. When we ran out of money for the renovations and I had some health problems we arranged an interest free period on our Halifax 5 year fixed mortgage.

As it was unihabitable what type of mortgage\loan were you advanced?

Is this your home?

debbyog

A 5 year fixed interest mortgage. It was deemed habitable as it had a bathroom and we fitted a tempory sink unit before the survey.
D