Help - Option Mortgage Facility withdrawn!

Freepost

I wonder if anybody can offer some help or guidance, I have an Option Mortgage, a mortgage with a cheque book facility. The idea is that as you pay off the capital you can use the cheque book to make purchases over £500 provided you don't take the level of the mortgage over what was originally agreed.

I've never used the facility until now, I had repairs to my roof carried out ... basically a new roof and paid for the works using the options cheque book. Unfortunately the cheque has been returned unpaid. The supplier of my mortgage tells me that the options cheque book facility was removed from my mortgage a few years ago and that they had written to me at the time. I've no knowledge of receiving a letter from them but can they do this? It's certainly not mentioned in the original terms and conditions that they can withdraw the facility. I really don't know what to do, the reason I took this mortgage was because of the options facility, access to easy money in case of a rainy day. I've never done anything wrong with my mortgage, never missed a payment or anything. Todate I have repaid approx 75% of my mortgage.

Without access to this money, I'm really in the brown stuff.

F.

getmore4less

which lender?

Freepost

getmore4less wrote: »

which lender?

Does it make a difference? At the moment I would prefer not to name the lender ... just me being a little bit jumpy:o!

F.

kingstreet

Since 2008, many of the borrow-back/cheque-book type options have been withdrawn. I think lenders felt they needed to demonstrate they were being more responsible in the wake of the credit crunch.

Woolwich sacked its open plan cheque-book facility as far as I know and most of the borrowback schemes were amended to include status checks so they couldn't be accused of irresponsible lending again.

Freepost

kingstreet wrote: »

Since 2008, many of the borrow-back/cheque-book type options have been withdrawn. I think lenders felt they needed to demonstrate they were being more responsible in the wake of the credit crunch.

Woolwich sacked its open plan cheque-book facility as far as I know and most of the borrowback schemes were amended to include status checks so they couldn't be accused of irresponsible lending again.

Hi, Thank you for your response.

I'm aware that my provider has withdrawn the option mortgages from its list of products that they provide but can they withdraw something you've already sign up for? ... I mean, I purchased and options mortgage, if they're allowed to do this I no longer have what I purchase, its one of the main reasons that I took the mortgage with them.

F

Thrugelmir

Freepost wrote: »

I'm aware that my provider has withdrawn the option mortgages from its list of products that they provide but can they withdraw something you've already sign up for? ... I mean, I purchased and options mortgage, if they're allowed to do this I no longer have what I purchase, its one of the main reasons that I took the mortgage with them.

Your lender would have covered such an eventuality with in the terms and conditions of the mortgage contract.

Approach your lender for a home improvement loan which will enable you to pay for the work undertaken.

Freepost

Thrugelmir wrote: »

Your lender would have covered such an eventuality with in the terms and conditions of the mortgage contract.

Approach your lender for a home improvement loan which will enable you to pay for the work undertaken.

My circumstances have changed somewhat over the years and obtaining a new loan will not be so easy and in any event I think a home improvement loan will be more expensive than the mortgage rate.

F.

kingstreet

Freepost wrote: »

My circumstances have changed somewhat over the years and obtaining a new loan will not be so easy

That's exactly why lenders withdrew these types of product from the market and removed such facilities from products they had already sold. I would expect a simple contractual requirement of a warning and notice of withdrawal in the terms would handle it.

It's very much akin to credit card providers cutting credit limits and terminating the accounts of unused facilities cardholders.

Thrugelmir

Freepost wrote: »

My circumstances have changed somewhat over the years and obtaining a new loan will not be so easy

So you can understand why the product was amended..........

Leon_W

Actually Freepost, I completely agree with you.

You have paid a rate premium for a facility which you rightly expected. Offset and Drawdowns were sold as additional benefits but these mortgages were generally more expensive so now what you have is a conventional mortgage at probably a premium price.

As to the legalities of it. I haven't a clue but if you are not getting what you expected (and paid for) then I think you have reasonable grounds for complaint.

kingstreet

Were products like Woolwich OP offered at higher rates, Leon? I genuinely can't remember. Although I do remember flexible mortgages without these options being more expensive (I'm thinking Abbey here, for example.)