Will lender waive ERC for misinforming me of lending criteria to port?

Dadov2

I am self employed (director of Ltd company) and am moving home with just under 6 months left on a 2 year tracker deal. My lender/bank informed me over the phone that I could port my mortgage (as per T&Cs) and ran through affordability etc over the phone which was all good.

The bank clearly stated over the phone that I would only need my SA302s for the last 3 years (official documents from HMRC to confirm taxable gross income - which I have). I double checked this and she made a note on the system to confirm that we agreed SA302s only were required. However I was informed I could not make a formal application to port the mortgage until I had an offer accepted on a property.

3 days later, after agreeing the sale of my property and having an offer accepted on the property I want to purchase, I returned to make the application to port with my lender. 45 mins into the call they agreed all is good provided I produce 2 years accounts!!

I cannot provide 2 years accounts (new company as of 2012) and I knew I would not be able to hence I checked upfront before making an application.

I have a written offer in principle from another lender who has confirmed in writing that I will only need to show 3 years SA302s. I would go with this but have to swallow £8.5k ERC from my current lender....for the sake of 6 months left on the tracker rate! In effect my current lender has made me a mortgage prisoner.

Could I use the misinformation they gave me over the phone as leverage to waive the ERC? I have the name, date and time of call plus confirmation she made a note on the system. Plus I have banked with these people for 20 years and have a great track record with them. Any tips from those with similar experience welcomed.

dunstonh

However I was informed I could not make a formal application to port the mortgage until I had an offer accepted on a property.

That is correct and normal stance.

I think part of the problem is that you are referring to yourself as self employed when in reality you are a director of a limited company. So, you were given their self employed criteria but when you applied you were given the limited company director criteria.

Could I use the misinformation they gave me over the phone as leverage to waive the ERC?

You can ask them. They may say yes but I suspect they will say no. It isnt really their error if you asked them the self employed criteria when you are not self employed.

Plus I have banked with these people for 20 years and have a great track record with them.

Although you are asking them to write off £8500. No small amount.

Dave_Ham

Forget the mortgage lender, anything they come up with will be a bonus.

I would suggest speaking with your buyer and vendor as 6 months is not long in the world of home buying/selling and the chain process.

You may find that with some appropriate charming conversations you can achieve everything you want...

Good luck

Dadov2

Thanks for the advise. Will report back once I have escalated as high as I can and have a decision.

A pro rata reduction in the penalty (to cover any loss they may incur) would seem fair treatment but agreed the likelyhood is they will say no. I will sit it out for 6 months and then take all my accounts, mortgage, insurances etc..elsewhere.

Shame as I really have got on well with my bank manager over the years but it seems the trend is now to provide relationship managers who are just tasked with upselling products and have no real power to make a decision. Not really worth 20 years brand loyalty for the sake of an air lounge pass and car breakdown service.

Bring back the bank manager!

Thrugelmir

Dadov2 wrote: »

Bring back the bank manager!

That's what is beginning to happen and why your port application was declined......

The clock is being turned back.

opinions4u

Bring back the bank manager!

But fewer people got the loans they wanted when the bank manager made the lending decisions.

Simon_gloster

Who is this lender by the way?

It seems you cant get what you want and now your throwing your toys out the pram as its costing you a few quid and taking your custom elsewhere......thats your choice and no-one can force your hand either way.

A lending criteria is there for a reason......the lender breaks it for one, then they may as well lend to all situations ie newborns!!!!


Your employment set up is not run of the mill, simple. Again your choice to do it that way and escalating it higher may help, however do you think you're outcome will happen in a couple of days? Doubt it.

Wh05apk

Most lenders prefer SA302s as they seem to be incapable of interpretting accounts, so I suspect they may be acceptable, who is the lender, and what amount are you looking to borrow? as most lenders have specialist teams for larger loans who can be a bit more flexible.

Dadov2

Natwest ...and not received a call back as promised. I've been passed between 3 different departments who say the records aren't interlinked. I have to make a formal application on the understanding that it will fail (because I can't provide 2 years accounts) before it will be visible to the redemptions department. So this will affect my credit report which is currently excellent.

It is then up to the redemptions department if they will offer to waive the ERC..as my only option is to go with another lender if they insist on 2 years accounts to port. Based on the comments on this site it seems them waiving the ERC is unlikely.

The monthly mortgage payments will be no different when we move and I have never missed a payment so it can be shown I am servicing the loan no problem. Also the SA302s back up the affordability.

I'm willing to take a small hit but I don't think it is reasonable to charge the whole ERC on a 2 year tracker with less than 6 months to go, so I will not move until then.

I was seeking genuine advice rather than having a whinge but if my situation is a common one and there is no flexibility on these ERCs, then this could be having a real impact on the housing market, worker mobility and the wider economy.

somethingcorporate

I don't think you can extrapolate your problem to the wider housing market. It's very specific that (probably) affects a tiny amount of the population.

I agree with Dunstonh that the wording you used is likely the cause of the issue. I cannot see why they would write off £8.5k ERC when it is clearly in the contract that you signed, regardless of the amount of time left on the contract.

I think you'll just have to sit it out and learn from this in the future.

dunstonh

I'm willing to take a small hit but I don't think it is reasonable to charge the whole ERC on a 2 year tracker with less than 6 months to go, so I will not move until then.

You should have thought about it before you bought the product. It was only 18 months ago that you bought it. If you thought moving was likely then you should have considered options more suitable. I know that isnt what you want to hear but that if you buy a product with tie ins that are fully disclosed at the start then moaning about them 18 months later seems a bit silly.

The monthly mortgage payments will be no different when we move and I have never missed a payment so it can be shown I am servicing the loan no problem. Also the SA302s back up the affordability.

Why are you focusing on self employment criteria when you are not self employed?