What does anyone think i should do!!!!

summer_dreamer21

Hello everyone!
i have had a mortgage with the alliance and leicester for approx 18 years, this was an endownment mortgage, basically i was advised by the a & l to switch to a repayment mortgage as the endownment mortgage would not be sufficient, with effect from sept 2003 at a fixed rate at 3.89% i agreed for my mortgage to be switched over, however after numerous telephone calls and branch visits i was assured this had been carried out, although i kept on questioning why my monthly payments had not gone down, but remained the same if not slightly higher ( i expected payments to go down as i had increased the number of years owing as advised this was my best option) Anyway after myself contacting a and l as i was still unsure if my mortgage had been switched an investigation was carried out on the 27th of january 2005 and i have had a reply dated 31st march 2005 which states that from sept 2003 at a fixed rate of 3.89% my mortgage should have been switched to a repayment basis, however this was not carried out and alliance and leciester have described it as a over sight on their part, and have assured me that am not any worse off as a result of their error, this i do not understand as my payments have been considerably higher than what they infact should have been, approx 100 a month higher. in recognition of their failure to switch the mortgage account over to a repayment basis they have offfered me 250 pounds which is the offset fee which they charged me in 2003, they want me to sign and agree this is ok within 28 days and thats the end of the matter, do you think thats good enough???
many thanks in advance
maria

mrcow

No it doesn't sound acceptable at all.

I'm confused though. Have you not been getting mortgage statements over the period in question? It would have stated your rates/loan period/loan balance.

Are they saying that you have been on a fixed rate of 3.89%, but on an interest only basis? and they didn't increase the term? If the figures aren't adding up to you (and they don't sound like they are), then you need to request a mortgage statement from them immediately before you sign anything to try and work out what exactly they have and haven't been charging. Considering the error that they've made, the least they can do is provide this for you. From this, you'll be able to work out how this monthly figure that you've been paying has been calculated.

I've no experience of A&L mortgages, but is this something that you can discuss in branch, or is it all done over the phone?

Personally I wouldn't sign anything with them until you are 100% happy with what's going on and if that means picking over every little detail of your mortgage then do it. The 28 day thing is probably their standard offer period.

summer_dreamer21

Hi MrCow,
Thanks for replying to my thread, i have quickly hunted out my anual mortgage summary/statement, which states the remaining term on my mortgage has 7 years and 10 months to run, mortgage type part and part interest rate 3.89% i have questioned the remaining terms and mortgage type at least 8 or 9 times, and have seen numerous mortgage advisors at differant branches of the alliance and leicester, and they all assured me that my mortgage had been changed to a repayment one, even with me taking in the above mentioned anual summary statement, now after paying the part and part mortgage they want me to switch to the repayment mortgage which i signed up for in 2003 and which they assured me i was already on, even though my monthly payments hadn't de-creased, they admit it was a over-sight on their part but i am not finacially any worse off even though they have shown me no evidence ( which i have continually requested on numerous occasions) When i ring the a&l call centre they Always advise me to make an appointment in my local branch with a mortgage advisor, im at a complete loss as to what to do, originally i switched to a repayment because i was on an endownment mortgage which didnt cover the shortfall, therefore they said the only thing i could do was to start a new mortgage increase the years, which at the time would have been benificial to us due to unforseen sickness and time off work! however we struggled to make payments and got by!! what would be the next step as i feel its being swept under the carpet! any help will be very much appreciated!!
thanks Maria

mrcow

Okay, I think that I'm a little clearer?

You were on an endowment mortgage
You wanted to switch to a repayment @ 3.89% fixed (and increase the term)
But they switched you to a part repayment mortgage @ 3.89% (and didn't change the term)
Is that right?

A repayment (or part repayment) mortgage will have higher monthly payments than an interest only mortgage as you're paying off your mortgage principal as you go. The increased term would have couteracted this, but if they didn't increase the term, then this could be the unexpected extra £100 per month that you have been querying.

If this is the case, then I doubt that you are any worse off in reality (apart from paying a different amount off your mortgage total than you were expecting) as this extra £100 per month will have come straight off the total amount that you now owe.

As far as what's best to do now, I think that making an appointment to discuss your options going forward is the best plan. Seeing a mortgage advisor will be able to clear up any doubt that you have over what's happened, and they will be able to provide written quotes and projections for you in order for you to make the best decision.

I stand by my last post. If you feel that you are being swept under the carpet, then keep on at them until you 100% understand exactly how better/worse off you are. Don't sign a new deal unless you are 100% happy with it. I think the faster that you can speak to them face to face about this, the better.

One thing......how long was the 3.89% fix for? If it's still going, make sure that they keep you on this rate, as I doubt that they have anything as competitive in their current mortgage portfolio.

But I'll stand corrected if anyone else know differently?

BTW - if the above is wrong, and they kept you on a completely interest only term, then something looks wrong here, as your premiums shouldn't have shot up by £100 per month (depending of course on what rate you were on before the 3.89%)

Lastly - are you tied to A&L for any period of time?

If I've confused you any further than A&L have, then I can only apologise....