Barclays (Wolwich) overpayments Grrrrrr.....

Morgage_Confused

:mad:

They're at it again......just when I thought I had got the hang of woolwich overpayments.

I got a letter saying they were dropping my monthly payments as I had just paid in an overpayment of 3k(lump sum). They referred to this as a part redemption and not an overpayment?

So I ring them up to put my monthly payments back up to 1k. No problemo so far.

Just before I get off the phone I ask what my balance is and it sounds just a tad too high. So I query the figure and ask if that includes the recent overpayment of 3k. Yes it does they say, but it doesnt include the £2,500 of other over payments(various smaller payments) which are sitting as a credit on your account?

These have not been taken off the balance and are therefore not helping to reduce my mortgage!

The guy tells me that untill the overpayments reach 3 times your monthly payment they just sit there and do nothing.

How so very frustrating.:mad:

harvey115

seems like they are using the monthly overpayments pot as a lump sum when it reaches certain threshold, not so good!!!

alleycat`

That doesn't sound right.

I'm overpaying every month and it comes straight off the top.

I admit they aren't "lump sums" of additional cash but as an agreed value with themselves to take via DD (alongside the normal repayment amount).

I suppose it is a subtle difference but it still sounds suspect.

Morgage_Confused

It doesnt sound right but I can comfirm these smaller ad hoc payments wernt being taken off my mortgage.
Its only when I lumped in 3k and rang to check that the guy said there were these other ad hoc payments sitting there as a credit on the account and i had to actually tell him to reduce the balance with them!

I must add this for once wasnt the call center in bangalore and I could actually communicate properly with the guy on the phone.

I wonder if I should do something about this as I was sure I read in my t&c's that overpayments work immediately to reduce the mortgage? Some of these payments must have sat there for 8-9 months?

In fact its just dawned on me....some of the ad hoc payments are actually from my monthly mortgage payment aswell as thats supposed to be about £920 and I pay £1000 per month.

How annoying...it means I have to ring up every month and tell them to apply it to the mortgage....surely thats not right?

harvey115

I heard about something similar with another lender as well, but I would not have imagined Woolwich would also be playing this game.

I remember it was more to do with the interest calculations when overpaid. The customer had to literally call every month to make sure interest calculations were taking the overpayment into consideration.

Morgage_Confused

Scrap the above....I just rang them back and been told something different yet again.

Different guy....different story but one which I am assuming is correct.

Over payments work straight away.
When "applied to the capital" over the phone they are classed as a part redemption.
Overpayments of "3 times normal payment" are classed as a part redemptions.
Part redemptions cause the system to recalculate the monthly payments.

He also said something odd. Overpayments (which are not part redemptions) can be taken back out again?

getmore4less

Check the Overdraft limit on the mortgage reserve, that should be going up.

be aware that unless you are offset borrowing back through the reserve is at the SVR rate not the mortgage rate.

Trying_to_be_good

With my old Woolwich mortgage (their admin was so appalling I eventually gave up the cracking tracker rate to go somewhere with customer service) I was able to draw out ALL overpayments just prior to the annual statement date, and then pay them all back in again (i.e. re-overpay the same amount) the day after the statement date and that kept all overpayments accessible at the original mortgage rate (rather than SVR).

Not sure I've explained that very well, so here's an example:

1. Overpay by £500 per month starting with the month after the statement date, all count against the mortgage balance for the calculation of daily interest
2. By a few days before the statement date, this overpayment 'pot' is now £3,000
3. Withdraw/transfer all £3,000
4. Annual statement produced with the balance owing as the 'normal' balance as you've withdrawn all the overpayments
5. Pay back in the £3,000 plus the new month's £500
6. By a few days before the statement date this overpayment 'pot' is now £6,000 and can be drawn out and paid back in the same way

This enabled me to keep easy access to all my overpayments, as if it were an offset, and never use the Reserve. The key was to have withdrawn the overpayments before the date the annual statement was produced.

Not sure if this is how it can still work, I don't envy anyone trying to explain this to Bangalore, but worth finding out!