Please help Land Compensation. Capital Repayment or Overpayment

Legacy_user

I have a Repayment Mortgage that was with Northern Rock but it is now known as NRAM. It states first movement was 04/04/2006, I have under ten years left to complete. Monthly Direct Debit payments differ slightly- 01, 02, 30 31 of the month. I am not sure how my interest is worked out, however I get a yearly statement and on 2013/2014 it states my 12 monthly payments in a long list. Payment Due, then underneath this Direct Debit, then underneath this Interest Debit 4.54% which is consistent down the list, but actual payments differ from £60 to 49 interest and this is repeated for the year down the list so I’m guessing this tells me I pay interest monthly.



I have been awarded £3000 Land Compensation from a local county council for reasons I do not wish to state and this has to be paid to NRAM as if it was proceeds of sale, this is the only way with no other options. My question is… Should I choose Overpayment (lump sum of balance, payments stay the same, or Capital Repayment where Balance the same payments are lowered?


I phoned NRAM a month ago for an update and after a discussion requested that when everything was sorted out I would like the Overpayment option, the advisor told me that it would automatically be a Capital Repayment if I didn’t choose however I don’t have this in writing.


Yesterday, I contacted NRAM again in the evening and they told me that the payment had been settled weeks ago, under the Capital Payment option. I made clear how angry I was about not being notified that the payment had been made and that they had done the opposite option to what I had requested. I was asked to ring back and speak to a mortgage department and not to panic as it doesn’t take effect until the 1st September. I couldn’t manage to wring back due to family commitments but I will phone them before the weekend when I have done my research.


Sorry for the waffle, but can anyone advise me which option to take, the importance of dates, and which dates I should choose if given the option, as I obviously want it to go to my advantage and not NRAM’s.


Thank you for your time.

Thrugelmir

Newlook wrote: »

Sorry for the waffle, but can anyone advise me which option to take, the importance of dates, and which dates I should choose if given the option, as I obviously want it to go to my advantage and not NRAM’s.

Interest will be charged monthly on your mortgage account. The amount of interest charged will differ as every month the capital balance owed will reduce slightly. In addition the interest charge is based on the number of days in the month. So the reduction between months won't be consistent.

Your best option is to make an overpayment. As this will maintain your repayments at the current level. (I assume that is affordable when I say this). The net effect of this will be to reduce the term and result in you paying off your mortgage quicker.

As you say the Capital option reduces you ongoing repayments. However means your mortgage won't be repaid any quicker. Unless you make overpayments on top.

To be fair to NRAM what option you choose makes little difference to them.

Southend1

I have replied to your identical post on the MFW board

anselld

If you keep regular payments at the same level it makes no difference.

System

Thrugelmir wrote: »

Interest will be charged monthly on your mortgage account. The amount of interest charged will differ as every month the capital balance owed will reduce slightly. In addition the interest charge is based on the number of days in the month. So the reduction between months won't be consistent.

Your best option is to make an overpayment. As this will maintain your repayments at the current level. (I assume that is affordable when I say this). The net effect of this will be to reduce the term and result in you paying off your mortgage quicker.

As you say the Capital option reduces you ongoing repayments. However means your mortgage won't be repaid any quicker. Unless you make overpayments on top.

To be fair to NRAM what option you choose makes little difference to them.

Hi Again,

Thanks for this information, however after speaking to two further NRAM agents I have been informed that, as it is compensation ( called insurance) I have no option but to take the Capital Repayment, however if I made a payment from my own money then I would have an option which would obviously be to reduce the term to pay off the mortgage sooner.

I also asked to speak to someone higher in the mortgage department but I am not allowed as this is not procedure, the only other person I could speak to is another agent lol but ( bearing in mind that the previous three agents told me that I had the option) due to stress I declined. This is apparently is all in my contract.

So to be fare it appears, that it does matter to NRAM, which option you take as they make the money through the long term interest, Surprise surprise.

I only owe £ 8000 so cant change mortgages to another bank as no bank is interested in me as they have a minimum mortgage £25,000'ish.

Do you know if there is anyone I can complain to Ombudsman etc? So grateful for your time thanks again.

System

Hi Again, I am just getting used to this site, sorry but I put this reply on the end of another instead of directly to you.

Thanks for this information, however after speaking to two further NRAM agents I have been informed as it is compensation ( called insurance) I have no option but to take the Capital Repayment option, however if I did make a payment from my own money then I would be offered the option which would obviously be the Repayment to reduce the term to pay off the mortgage sooner.

I also asked to speak to someone higher in the mortgage department but I am not allowed as this is not procedure, but the advisor put me on hold and claimed that he did speak to them and explained the outcome. The only other person I could speak to was another agent lol... ( bearing in mind that the previous three agents, including another one this morning, told me that I had the option) due to the stress and what seems an obvious outcome I declined. This apparently is all in my contract.

So it appears that it does matter to NRAM, which option you take as they make the money through the long term interest, Surprise surprise. It also appears that the agents or at least one of them is useless and I have never come across not being able to actually speak to someone higher in command in any department of any description before.

In summary, I only owe £ 8000 so I can't re-mortgage to another bank as no bank is interested in me, I am small fish. The minimum mortgage is £25,000'ish- £50,000 which defeats my objective of paying off avoiding debt and paying my mortgage off sooner.

Do you know if there is anyone I can complain to Ombudsman etc? So grateful for your time thanks again.

Mattygroves2

As has been said just keep your repayments at the same level by paying the extra each month by standing order and you will still pay your mortgage off early. Do you gave penalties for making regular overpayments that prevent you from doing this ?

Not sure what the Ombudsman is going to do for you as it is up to NRAM what method they use to record your part payment of capital.

zain8500

No need to do over payment...........

Angry_Bear

Have reported previous post as spam as it looks like the poster is just trying to build up post count to post links.

Thrugelmir

Newlook wrote: »

So to be fare it appears, that it does matter to NRAM, which option you take as they make the money through the long term interest, Surprise surprise.

On a balance of £8k hardly a huge amount of interest.

Overpay every month with an amount you can comfortably afford. The mortgage will be paid off before you know it.

System

A big thanks for your help.