C & G Mortgage Overpayments - Help

MarkyMarkD

UK007BullDog wrote:

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.

And if the customers were sensible, they would notify their lender that they want their term to be reduced as a result of their overpayments. I don't believe that, in order to treat customers fairly, you need to assume that they are stupid and incapable of asking to have their term reduced.

As I said before, the term of your mortgage is a contractual term. The monthly repayments are not - they are the repayments required to pay off the mortgage over the contractual term.

Nationwide may (and I use that word advisedly) state in their mortgage contractual terms that, if you make an overpayment, they will treat it as a request to reduce the contractual term. If they do that, that's fine.

LTSB may conversely state in their mortgage contractual terms that, if you make an overpayment, they will reduce your repayments and not alter your contractual term unless you ask them to do so. If they do that, it's also fine.

Neither is any more or less fair.

Neither is making either of those assumptions, and telling the customer you've done so, even if the terms & conditions don't mention it. As I said before (again) in my opinion if there's no mention in the terms of what happens in the event of overpayment, legally the term should NOT be altered and the repayments SHOULD be reduced.

Xbigman

maple41 wrote:

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.

If you pay the C&G by cheque through the post you get a form to send off with future payments which gives you the option to either reduce the term or reduce payments. It looks to me like their system is designed to work best with cheque payments and not online transfers or in branch. Annoying but not a deliberate rip off.

As for settlement figures, don't forget that with amounts that are in the tens of thousands of pounds even a few days can alter settlement figures. If you request a settlement figure around your usual payment date it can be hundreds of pounds. This happened to me this year. I phoned in on 2nd Jan to get updated figures but they made no sense. It all had to do with the next months interest being added on 31st Dec but the payment not yet being in the account when I called on the 2nd. However, when the confirmation letter of the new payments came it was spot on what I had worked out.

As for the reduce payments or term question. It is not as clear cut as some would make out. For one thing you need to allow for inflation reducing any real savings if you reduce the term rather than the payments, which is often overlooked.
Regards



X

Claire_Jones_3

I work for said company (don't take it out on me, someone has to!) so may be able to answer a few questions.

Capital repayments: It has to be in excess of £1000 to be classed as a capital repayment and therefore re-calculate the balance. that why the £5k did and the £1k's didn't. When you made the £1k's the payment would be re-calculated with the next annual statement run (1st Jan) or if you are on a variable rate and the base rate changed. If you were to make the capital repayment online/by CHAPS payment in branch then it can only be charged as an overpayment as there is no intervention by staff, e.g goes straight to mortgage acc and shows as a credit balance. That why if you want the payments to be re-calculated its best to do so by cheque with a covering letter to state if you want it to reduce term (on a repayment mortgage) or to reduce payments.

With redemption figures it can vary depending on whether you have already made you payment or not that month as if your payment comes in on the 1st of the month it clears the interest for that month but the interest is not charged until the end of the month. But if our mortgage is on an annual scheme it is costing you more and it needs to be changed (something C&G do for free if you are on annual interest and ask them to change it).

Also just to let you know the mortgage unit has been there since 1992

Hope that helps
Claire