Natwest mortgage retainer issue

mark_ashley

Hi,

could anyone help me with the above? 18 months ago we bought our first house but had to pay a £3k retainer for the below reasons:

Old electrics
Old boiler
Old windows
Squeaky floorboard

We have refurbed the house and so paid for a reinspection. The surveyor didnt look around the house, just to make sure the 4 points had been done.

Called Natwest who now say that they wont refund the money because I am building an extension??

The extension has no effect on the 4 points the surveyor checked and to be honest Im pretty annoyed that they should feel its any of their business as it has nothing to do with the terms of the mortgage in respect of the original retainer.

Can anyone offer any help or info, its part of an ongoing issue I have with these surveyors (and this post was longer but for some reason it didnt submit?), so feel free to ask any questions as any advice would be welcome.

Many thanks,

Mark. :beer: <- Im doing dryathlon so this is as good as it gets!

opinions4u

What do the terms and conditions of your mortgage say about making structural alterations without the lender's consent?

kingstreet

You don't pay a "retainer."

When the lender holds a retention, you increase your deposit to make up for the amount the lender holds back. You normally have a fixed period in which to get any work done, then you can request the retention be lifted and the funds released.

Eighteen months is a lot longer than the usual six months, so the retention is now out of the way. You have a lower mortgage, pay less in interest and have more equity in your property as a result.

They aren't refunding money because you did not pay them anything.

For what purpose have you had a reinspection? You are building an extention? Are you borrowing more money from the lender to fund this?

Why do you think there is a connection between issues 18 months apart? What's the link?

mark_ashley

The retainer I paid a £24k deposit on the house and then I paid a further £3k which was not deducted from the mortgage as far as I was aware? The retainer I paid had no effect on my interest either.

There was no minimum length of time that the repairs had to be done in.

The reinspection was asked for by the bank purely to ensure I had carried out the work I said I would (boiler, electrics, squeaky floorboard, rotten wood around windows) - they would not return the money unless this had been paid.

The extension HAS been built from my own money. The reinpection was purely to ensure I had done the work stipulated on the surveyors original report.

I have no idea whatsoever why there should be a connection between the extension and the work originally asked of me when I bought the house.

kingstreet wrote: »

You don't pay a "retainer."

When the lender holds a retention, you increase your deposit to make up for the amount the lender holds back. You normally have a fixed period in which to get any work done, then you can request the retention be lifted and the funds released.

Eighteen months is a lot longer than the usual six months, so the retention is now out of the way. You have a lower mortgage, pay less in interest and have more equity in your property as a result.

They aren't refunding money because you did not pay them anything.

For what purpose have you had a reinspection? You are building an extention? Are you borrowing more money from the lender to fund this?

Why do you think there is a connection between issues 18 months apart? What's the link?

kingstreet

If this is as you described, it isn't a retention then.

A retention simply means this, for example;-

Before valuation done

£100,000 purchase price
£5,000 deposit
_______
£95,000 mortgage

Equity in property £5,000

After valuation done

£100,000 purchase price
£8,000 deposit (as mortgage amount reduced by £3,000_
_______
£92,000 mortgage

Equity in property £8,000.

You need to establish exactly what happened as the nature of a retention is the amount is deducted from the mortgage advance before it is issued and you do not pay interest on it, until it is released.

I do not understand why a lender would do a reinspection for this after eighteen months, if you did not request the retention money from it.

mark_ashley

Sorry I'm with you. Apologies I was getting myself in a middle but yes you are right in what you are saying regarding the finances.

However, the issue is I could really do with the money. As small amount as it would seem, when I bought the house I had a certain budget and the £3k came from the bank of dad. I promised once we moved in I would get it back to him and that's what I am trying to do.

So my query is more regarding the decision to delay the money getting back to me based on work that was not requested on the original survey.

Mark.

kingstreet wrote: »

If this is as you described, it isn't a retention then.

A retention simply means this, for example;-

Before valuation done

£100,000 purchase price
£5,000 deposit
_______
£95,000 mortgage

Equity in property £5,000

After valuation done

£100,000 purchase price
£8,000 deposit (as mortgage amount reduced by £3,000_
_______
£92,000 mortgage

Equity in property £8,000.

You need to establish exactly what happened as the nature of a retention is the amount is deducted from the mortgage advance before it is issued and you do not pay interest on it, until it is released.

I do not understand why a lender would do a reinspection for this after eighteen months, if you did not request the retention money from it.

tigsly

you can ask them 'to revalue your house to extend your mortgage'... if your house is worth more now than it was then - they might 'add the extra' to your mortgage..

that said, they might not think your house is worth more now than it was when you bought it.. they might but they might not..

I do have to ask- how did you afford the extension? - if you owed your dad money - surely you would pay him first - then pay for your home to be extended..

also was the home extended nicely - wouldhn'nt that add more value to your house.. if not i guess your screwed?!