Santander mortgage shocker! Advice or similar experiences wanted please.

loadieboy

Hi,

I have a Santander mortgage which started in Jul 10 on a fixed rate deal for 4 years. Early last year my partner moved in and allowed me the fortunate position of paying off a large chunk of the debt. As I did not want to pay the early repayment fees of around £4K, in discussion with a Santander representative, it was suggested to me that I shorten the term of the loan. This allowed me to pay off a large portion, with the advice that when i reached the end of my 'extra' amount, I would change the term back to a longer period and so change the monthly repayment fee back to a managable and sustainable amount.

Well, that was the theory! It has not unfortunately proved to be quite so simple.

I first contacted Santander in early March this year to advise them I'd soon be running out of the extra money so could I put the mortgage back to what it was before. The response: No - you need to go through a complete reapplication process. I was quite surprised at this, but was told that new rules had been put in place since I took out the mortgage. Not to worry - I'm applying for the same mortgage but asking for considerably less money to borrow I thought....

This was done but due to "a Santander IT problem" I was not advised at the end of that hour long telephone application if it was successful. That was on the 28th March 13, and since then I have been chasing them for a response.

Yesterday on contacting Santander again and after going through the obligatory 3 different call centres I uttered the phrase, "I need to speak to Joseph in your Belfast office to speak about my application because from next month I will not be able to afford the current rate". Cue change of tone and I now find myself talking to the collections department!!:mad:

I explained to that (very nice) man that his suggestion of going through all my incomings/outgoings has already been done, but not completed by a colleague. I am advised that unfortunately this is the next course of action. In the meantime though I rang back to try and get through to the Belfast office who'd done the mortgage application and ask what was going on. I am stopped at this point and told, "the Belfast office have advised us that your application has been unsuccessful". :eek: On asking why I have not heard anything or had absolutely no correspondence from Santander since March 28th, I am told they will email Belfast and get them to ring me! (This is the same office who have consistently failed to ring back when they said they would)

And so I am left with the prospect of a mortgage I cannot pay.

Please excuse the slight rant. So now my questions are:
- Has anyone else experienced anything similar?
- Does anyone know if there has been legislation regarding mortgage changes introduced since March 12 (the month I completed the increased mortgage amount application)
- Any advice for moving forward? I sent their customer complaints a detailed email/letter to follow yesterday and so now have the 8 weeks to wait according to the Financial Ombudsman.

It seems barking mad to me that I am suggested a course of action by a Santander rep when I made perfectly clear I could not afford to complete the shortened term completely without changing it back. There was NO suggestion or advice at that point that I would either have to go through the whole application process again, or that they reserved the right to decline changing it back. A bit naive of me perhaps, but most things are in retrospect. But my main complaint is that this is totally at odds with responsible banking!!

Any thoughts or suggestions gratefully received. Thanks for reading.

kingstreet

Nothing to suggest, other than to do what you are already doing.

I don't understand why shortening the term was deemed necessary, if your mortgage product allowed 10% per annum overpayments as they often do?

Abbey/Santander's policy to only allow an extended term in cases of financial hardship appears to be what has caused you this issue and had you known about this previously, you would probably not have embarked on the reduction in the term in the first place.

Complaint/FOS route appears only option.

redkenny

If I remember correctly I'm only able to make the 10% overpayment in Jan on my Santander mortgage, which may be why they suggested reducing the term instead (My term have transferred from A&L though so may be different.

I've got another mortgage with nationwide and their mortgage advisor suggested reducing the term as a method of avoiding their overpayment charges during the application process. I'll be sure to check I can adjust it back if I ever go down this route have read the OP.

loadieboy

Shortening the term was suggested by the Santander rep. The sums involved (having 50K to pay off a £120K loan) meant that only paying off the extra 10% over standard repayments per year (which i also did) would have taken an awful lot longer.

As you say, I did not know about the extended term policy or I would not have followed this course. The fact that not only was that not mentioned (understandable of course if not policy at the time, but I would expect consideration for that now) but that the shortening was the suggestion of Santander is more than slightly frustrating!

loadieboy

I'll be sure to check I can adjust it back if I ever go down this route have read the OP

Yes, please do! This is not a nice situation to be in.

iammumtoone

I have had a similar problem with an 'alliance leicester' mortgage. I started off with an interest only mortgage then re-mortgaged to a re-payment but kept paying into the endowment. I was told when I took out the re-payment I could change it at any time to a interest only and just pay a fee (even had this in writing in form of a leaflet advising the fee charge to do this).

My circumstances changed and I could no longer afford to pay both endowment and re-payment so asked to change back to interest only. They would not allow this even though I could prove that I had been paying into the endowment and had the letters staring it was on track to pay out the required amount. The only option they offered me was to re-apply for a interest only mortgage but as don't have a job at present I would not qualify for a new mortgage.

As it looks like you are going to have to re-mortgage now anyway I suggest that you move your mortgage elsewhere. Are you able to get a better deal elsewhere it might turn out to be a good thing for you in the end.

loadieboy

Hi iammumtoone, I'm sorry to hear about your experiences, they certainly seem to have us over a barrel don't they! Oh yes, I will certainly not be using Santander again.

Thrugelmir

loadieboy wrote: »

But my main complaint is that this is totally at odds with responsible banking!!

That depends on your personal financial circumstances. Lenders ultimately have the final say. If they no longer want your business then remortgaging elsewhere is your only real alternative.

michaels

OP are you still in the original 4 year tie in period for the mortgage so going elsewhere is not an option?

Presumably to 'overpay' about 40% of the mortgae in a few months the term was reduced to something very short - may be only to about the end of your original tie in period? In which case finding the money to pay off the mortgage by other means (loan or whatever) sounds impossible leaving you with no option but to remortgage and suffer the overpayment charge.

I think an FOS complaint would certianly be in order as you ar enow borrowing so much less than you hads done originally I can't see why they find extending the mortgage back to a sensible length is impossible.

CassieD

I had a £125000 mortgage with Santander which I was only able to repay on an interest only basis. I therefore decided to sell my house and purchase a small flat, which would enable me to reduce my mortgage by £45000, to £80000, on a repayment basis (not interest only). In addition, as I had sufficient equity through the sale of the property, I could pay off a credit card of £12000. However, at the surprise of the mortgage adviser in the Santander branch, the application was declined. I still felt it best to sell my house to pay off my credit card debt. However, as I was repaying the mortgage 6 months early, I was then forced to pay £4000 to Santander in early repayment fees. Does anyone have any similar experiences or advice as to any way I could be reimbursed the £4000?. I wrote to head office who politely replied in the same manner as declining the reduction in mortgage .....NO!!! None of this makes financial sense.

opinions4u

CassieD wrote: »

I had a £125000 mortgage with Santander which I was only able to repay on an interest only basis. I therefore decided to sell my house and purchase a small flat, which would enable me to reduce my mortgage by £45000, to £80000, on a repayment basis (not interest only). In addition, as I had sufficient equity through the sale of the property, I could pay off a credit card of £12000. However, at the surprise of the mortgage adviser in the Santander branch, the application was declined. I still felt it best to sell my house to pay off my credit card debt. However, as I was repaying the mortgage 6 months early, I was then forced to pay £4000 to Santander in early repayment fees. Does anyone have any similar experiences or advice as to any way I could be reimbursed the £4000?. I wrote to head office who politely replied in the same manner as declining the reduction in mortgage .....NO!!! None of this makes financial sense.

You won't be able to reclaim an ERC.