Can a mortgage lender refuse to provide a redemption figure?

aureli10

Hi

My fixed term with Principality Building Society ends on 30th June 2015 and I emailed them to get a redemption figure so that I can get re-mortgage quotes. They refused this request on the basis that they cannot account for unforeseen changes in the future. I have replied back with a strongly worded email but need to know if a lender is obliged to provide a redemption amount, based on request.

I find it absurd that a mortgage lender can refuse such a basic request, especially given that it forms the basis of a key figure that then can get you a good deal or not. Even more so absurd as there is nothing out of the blue with regards to this request.

Unfortunately as I am not a mortgage provider I cannot see what lurks behind their calculations but if I am on a fixed rate and am willing to redeem the mortgage the next day the fixed rate ends, what could these unforeseen changes be?

Appreciate any guidance you can provide.

TrickyDicky101

They can give you a redemption figure at today's date if requested, but not a future one as that is dependent on what is repaid/charged in between.

You can estimate what your balance will be if you have a known outstanding balance (eg last mortgage statement) and what rate you are being charged and what the term and repayment amounts are - again, the accuracy would depend on whether rates stay the same and whether you make the same payment each month.

kingstreet

They should be able to provide a redemption statement now. If you are asking for one for 1 July, they may not be able to provide that until closer to the time.

Thrugelmir

aureli10 wrote: »

what could these unforeseen changes be?

You don't pay your mortgage or merely fail to make a payment on time.

Lenders systems don't forecast either. So will require someone to calculate the figure.

Easy enough to estimate what the balance is likely to be. Take a look at your last annual satement. You know what you are paying the lender every month and the amount of interest you are incurring. This will give you a ball park figure with which to obtain quotes. Transferring mortgages isn't a precise science.

ACG

Your asking for them to give you a figure 80+ days in advance. No lender would give you what you want - strongly worded letter or not.

You can get a redemption figure as has been stated but not 80 days. When I worked for Co-op bank they would only provide it 7 days in advance.

I can see your argument, how much do I need to remortgage etc. But you can guesstimate it (not forgetting the deeds release fee) and you will not be a million miles out. You can then reduce the loan amount if you wish or likely get a cheque from your solicitors for the balance if there is anything left over.

lucie_1985

In all honesty because of this I created my own spreadsheet to calculate how much I have outstanding in any given month - and also so I can see how overpayments affect it. Then I reconcile it back to my mortgage statement at the end of the year. The formulas are easy-ish enough but the way overpayments are treated depend on the terms of your particular mortgage, we're with Nationwide and providing you overpay by £500/month the interest level is reduced the following month - any less and the interest isn't reduced until the mortgage anniversary.


I'd be happy to post the spreadsheet I made but I'm sure it probably violates something or other(!)

TrickyDicky101

lucie_1985 wrote: »

In all honesty because of this I created my own spreadsheet to calculate how much I have outstanding in any given month - and also so I can see how overpayments affect it. Then I reconcile it back to my mortgage statement at the end of the year. The formulas are easy-ish enough but the way overpayments are treated depend on the terms of your particular mortgage, we're with Nationwide and providing you overpay by £500/month the interest level is reduced the following month - any less and the interest isn't reduced until the mortgage anniversary.


I'd be happy to post the spreadsheet I made but I'm sure it probably violates something or other(!)

I think you meant that NW will automatically reduce your monthly repayments if you make an overpayment of at least £500 (unless you have specified to NW to reduce your term instead). Any whole-pound overpayment will reduce the interest you are charged, however, from the day you make the overpayment.

lucie_1985

Yes, I meant that the total monthly payment that you make the next month will reduce in line with the reduction in the interest portion of the total payment amount that you make each month, obviously the repayment element will stay the same.


I was told by NW that in terms of total £ repayments that we wouldn't actually see any reduction in the monthly payment as a result until the mortgage anniversary.


I'm better with numbers than words!

aureli10

Thank you everyone for your guidance.

After all of that, Principality have come back with a redemption figure as of 1st July!! Amazing how a bit of pressure can get them to do their job properly.

If mere mortals such as some of us can use some form of intelligence to work out the figure, then I would at the very least have expected these specialists to do better than that. Of course, it is but natural that the figure is an indicative figure but at least it proves that they can provide this.

I will anyway get a true picture in the last few days before the fixed rate ends.

Thanks once again...