Mortgage Offer Confusion

ACG

The 2 year deal does not start straigth away. It just has a set end date. 2 year deals can be more or less than 2 years. Typically it can be up to 3 months more or 3 months less.

The ERC will tie in with the end date of the deal. So come December 2016 your ERC will stop and you are then free to switch lenders without paying those fees. Its worrying your broker needed to go off and check that as it will be stated on the KFI and Mortgage offer.

jls85

Thanks ACG. So despite the fact it states on the offer that I must pay fees if I repay before the beginning of year 3, I should still be able to remortgage because the ERC (not sure what that is) will have ended?

kingstreet

It is not a two year fixed deal.

It's a fixed deal until 31 December 2016.

This information is shown in section four of the key facts illustration and mortgage offer.

Any Early Repayment Charge, or ERC, is shown in section ten of the same key facts illustration or mortgage offer.

No-one here can comment on what your broker has told you, but the above information is standard.

If you want a product which is fixed for x years from completion, that is what you have to buy from a lender which offers it.

jls85

Thanks Kingstreet. I understand what you are saying, but the point is that's what I thought I was buying.

I'm a first time buyer doing this on my own, and I didn't realise you could get a fixed deal up until a certain date nor am I familiar with KFIs or how these look/are worded, so while it might seem perfectly obvious and standard to someone who works in the industry, I have been relying on the advice of my broker all the way through and now at offer stage feel I am stuck with something different than what I originally thought I was signing up for.

I do thank you all for your advice - much appreciated.

jls85

Also, for those referring to ERCs, the whole offer is written as if I am beginning the morgage now. It refers to 24 payments assuming I begin paying them from January 2015, and the fees match up with this. Is this right or shoudl the offer show the suggested completion date as the starting point?

kingstreet

Right.

In front of me I have a Leeds Building Society key facts illustration, or KFI for short. That's the quotation which confirms all the mortgage information, such as loan amount, term, rate, fees etc.

I also have a Leeds Building Society mortgage offer.

The latter reflects the former, as it is simply an extention of the KFI.

On both my documents, section four says the product is fixed until DD/MM/YYYY.

On the offer, section ten about early repayment charges/penalties (ERC) says "month one to twelve... until DD/MM/YYYY" so regardless of the commencement date the ERC is chargeable only until the end date of the product, which in your case is 31/12/2016. Does your mortgage offer, section ten, say the same thing or does it only say month one to twelve, month thirteen to month twenty four?

The bottom line here is you've got what you've got. You either stick with it or contact the broker you chose and ask them to replace it with another lender which will provide what you want. If you feel the broker has misled you in some way, ask them to cover the cost you have wasted.