C & G Mortgage Overpayments - Help

guy999

Been overpaying this year several amounts to my mortgage of about £1000 at a time.
However at xmas, repaid £5000.
Been making payments online direct from my lloyds tsb current account internet banking system.

However today recd letter saying that they they have 'actioned your recent capital repayment of £5000', and as a result have lowered my monthly payment.

But why have they sent me a letter saying this, they didnt before and also wouldnt the other payments be classed as 'capital repayment' or are they classed as something else.
Now read somewhere that they can only receive overpayments by cheque

Worried that my money hasnt gone to account.. help

Tried to ring them as soon as got read this letter but closed until monday!!!

Xbigman

Thay told me they don't accept online transfers but in theory its possible so I don't know why not. Possibly its just how they like to work. Anyway that seems to have worked ok for you.

The answer to your other question is that they only recalculate your payments if you make a large lumpsum payment. If you have been paying lots of small payments they may have not been enough to trigger a payment recalculation, whilst the 5k certainly was.

Nothing to worry about but its worth phoning and checking all the online transfers have been credited.

EDIT. please let us know what happens as I'd prefer to do online transfers too.
Regards



X

guy999

MAny thanks
Sure everything is okay, will ring monday and post back here

UK007BullDog

It seems that they have recalculated all the sums you have paid in along with the lump payments and have instead of shortening the overall mortgage term, just lowered your monthly payments.
(The lenders aim would be to keep the mortgage going as long as they can to get all the interest payments = profit).

But I think what you really wanted was to keep your monthly payments as they are and shorten the overall mortgage term.
(Which is better for you as you would pay less interest over the years).

MarkyMarkD

You have a very cynical attitude, UK007.

If you make overpayments and don't bother telling the lender what you want to happen, they have to make a decision about whether to reduce your monthly payments or reduce your term.

As you sign up for the term of your mortgage at the start, it's part of the agreed contract terms.

They couldn't therefore reduce your term without your approval, and this is why they default to reducing your payments.

As others have posted, lenders will also have a minimum level of overpayment which they choose to treat as a capital payment and which will trigger a recalculation of the interest bearing balance (which otherwise might not happen, if it's an annual interest mortgage) and/or might trigger repayment charges. This is often £500 but it could be £1000 for LTSB.

maple41

Beware with C&G, we had a mortgage with them and made extra payments (annual lump sum), all went well for about 3 years then they moved their mortgage dept and for the past 3 years they messed it up. Even though we told them, by going into the local branch when we made the payment that we wanted to reduce the term, HO always wanted to reduce the monthly payment. When we came to redeem the mortgage last year they couldn't even produce a correct redemption figure, over the phone, in a C&G branch and by letter (snail mail) evry time it was different and they couldn't explain the differneces except to say "that is what is says on the system". Suggest you write to HO and make them deal with it as a formal complaint if you aren't happy. At least we got them to write off the redemption charge.

UK007BullDog

What is your problem MarkyMark? Have I done something to you that you follow me through the posts and critique my postings?

Lenders are a business, they need/want to make money. If they don't then this board would be obsolete. This board is successful as people want to get back what was taken from them in sneaky ways.

As far as I am concerned the lenders look at number 1, which is themselves first of all.

I work in the industry and see what is going on, that is why I am here to help and give tips and help.

I understand that businesses have to make money but there is a limit as to how many Billions they make a year. Last year profits by the investment banks were obscene. Yes they pay tax on it but still not right in my books.

UK007BullDog

MarkyMarkD wrote:

You have a very cynical attitude, UK007.

As you sign up for the term of your mortgage at the start, it's part of the agreed contract terms.

They couldn't therefore reduce your term without your approval, and this is why they default to reducing your payments.
QUOTE]

Yes, but they could ask the customer what they want. But they dont and take the easy and profitable route for themselves.

I overpay and never told my lender what I want. They are reducing the term, not the monthly payments. Well done Nationwide!

Other banks are just greedy and take the easy route. That is not what the FSA calles "Treating Customers Fairly".

UK007BullDog

maple41 wrote:

Suggest you write to HO and make them deal with it as a formal complaint if you aren't happy. At least we got them to write off the redemption charge.

Yes, write to them and send per registered post so they cannot ignore it or claim the letter never reached.

MarkyMarkD

I don't follow you around, UK007. Don't flatter yourself. I post a lot on mortgage issues because I know a lot about them.

Nationwide do a lot of strange things, some of which they claim are better for the customer. I don't accept that they have the right to reduce a customer's mortgage term without their consent.

Yes, LTSB could ask what the customer wanted done with the overpayments. But when the overpayment was sufficient for them to consider it a capital payment, they've written to tell the customer what they are doing. The customer could presumably at this stage ask for the term to be reduced rather than the payments.

There's no obvious reason to assume that everyone wants their term changed, and I don't agree that it's a better assumption to make, or that it's evil for a bank to assume the opposite, or that they are doing so to maximise profit.

UK007BullDog

MarkyMarkD wrote:

There's no obvious reason to assume that everyone wants their term changed, and I don't agree that it's a better assumption to make, or that it's evil for a bank to assume the opposite, or that they are doing so to maximise profit.

Actually if you ask everyone on here their main aim is to get the mortgage term reduced if possible as they will save more interest that way. You just need to follow the thread on the other board about the TV series "Paying off the mortgage in 2 years". That is what people want. To get rid of the mortgage.

Only a small percentage will opt for the reduce monthly amount due to income pressures.

If the Lenders were following the Code and "Treated their Customers Fairly" as requested and partially enforced by the FSA, they would ask the customer right away what they want or reduce the term.

That is what people want. Thats what I get asked every day, how can the client reduce the overall mortgage term to save thousands of pounds interest.

The customers gain is the lenders loss. So yes, call me a cynic but I know that the lenders prerogatives are: Making lots of money for their shareholders and management!