TRAPPED overpaying on mortgage

amnblog

Their argument may be that the amount you were overpaying was above normal limits so they adjusted the term to compensate.

I would be surprised however if they think a verbal agreement holds water.

lemoncurd76_2

Turns out now that the woman I spoke to who told me 'no' doesn't understand company accounts or how to interpret them. After guiding her through our accounts step by step and pointing out profit and dividend payments made she now thinks we are able to afford to reduce our payments... sigh. Am so cross that they let untrained people make a decision on something as important as this!

dunstonh

When you make an overpayment request, you can have it simply as an overpayment but leaving the original terms in place. Or you can ask them to adjust the mortgage to reflect the new payment. The later changes your terms. The former does not.

So, my guess at this stage is that you used an overpayment method that changed the terms (by reducing the number of years). And any change of terms on MMR now requires affordability checks.

onlyroz

This is interesting. I have a Santander "Flexible Offset Mortgage". It has an "available funds", which is effectively the amount we originally borrowed, of £165k. We paid this down, over a number of years, to £140k. We then asked for the £25k that we had paid off back to fund an extension. This brought our mortgage back up to £165k, but the term stayed the same and our monthly payments went up.

So if we wanted to do the same again (i.e. borrow back the money we had paid off) would MMR mean that we would have to go through affordability checks on the increased monthly payments?

amnblog

lemoncurd76 wrote: »

Am so cross that they let untrained people make a decision on something as important as this!

I think you will find you were talking to one of the 'trained' staff

egoode

lemoncurd76 wrote: »

You are right Kingstreet I am going to make a formal complaint. We can actually afford to keep overpaying but want to reduce monthly payments as we will be renting the property out for a while, so therefore doesn't really make sense to be paying a mortgage which is higher than the rental income.

If you are planning to rent it out wouldn't you need to switch to a Buy to Let mortgage? At the very least I hope you have asked them for consent to let on your current mortgage.

amnblog

lemoncurd76 wrote: »

we will be renting the property out for a while.

What an enormous curve ball

lemoncurd76_2

We tried and failed to go down the buy to let route. This was the ideal and original plan. Anyway, again for various reasons that didn't work out so yes we have been given a permission to let by Santander. That was one thing that was easy to do