Mortgage Offer not same as KFI (long)

reformedEffortMaker_2

Right, please bear with me, i'm so angry that its taken me an hour to calm down in order to post this, so I hope it makes sense

Background

I had a mortgage for £90k on a flat with a mortgage (with woolwich) fixed at 4.45% for 1 year, expiring on 31/08/2007

I recently completed on the purchase of a new house (10/08/2007), costing £197k. I put down a £50k deposit, ported over the remaining of the above mortgage (£87k aka part 1) and borrowed another £60k (aka part 2).

Part 1 remained at 4.45% fixed until 31/08/2007 and then was going to change to +.49 over base rate

Part 2 was variable at +.24 over base rate, capped for the first two years at 5.99%

I was told by my mortgage adviser (from Barclays/Woolwich) that part 1 had no ERC's after 31/08/2007 and that part 2 had no ERC's at all!. This is what is listed in my KFI

There were a series of problems with the way my mortgage offer was handled (added the fee to the loan twice, miscalculated the LTV percentage, sent me an offer before my homebuyers file had been issued etc etc) I wrote a 4 page letter of complaint and it was resolved by me receiving a refund on my £900 valuation fee.


I was still so unhappy with the way woolwich/barclays dealt with the situation, that I decided to re-mortgage with another bank as soon as the ERC period expired on 31/08/2007.

I secured an offer with Britannia of 5.99% fixed for three years which I want, this has a £250 fee, but all other costs (legal etc) are waived if you go ahead with the mortgage. I have already had the house re-valued by Britannia and they have started the legal work.

Problem. Reading through my mortgage offer from Woolwich/Barclays again, it states that an ERC of £2,603 (3%) would be payable if I cancel mortgage before 31/08/2009!. As part 1 is tied-in for two years after the initial fixed rate ends.

This is completely different to what my KFI says and what my mortgage adviser told me.

I just called Barclays to clarify and they have said "sorry, if you move in the next two years you will have to pay the ERC on part 1".

My question to the people who know more about mortgages on this site is, if my mortgage offer does not mirror my KFI-do I have any grounds for a complaint and ultimately will have to pay the ERC?

(baring in mind that I will now have to pay Britannia for costs if I dont go ahead with the mortgage they have offered)

Thanks in advance for any replies

toonfish

if the ERC is noted on the mortgage offer then I reckon you're stuffed. Your solicitor should have gone through the offer with you before you signed it.

dunstonh

The offer letter is the key document here. As toonfish says, your solicitor would go through it before you sign it and point out your tie in period and the costs of early redemption.

KFIs are subject to change. Valations not coming in as expected or changes in the deals between KFI being issued and application accepted can all have an impact. The mortgage offer letter is king in this as this is the document that confirms the T&C.

Your mortgage broker (if you used one) would have found out you had early redemption charges before you put the application in to Britannia as that is part of their factfind. If you used one, you may want to discuss why wasn't it picked up by them and ultimately, if they have the liability for the Britannia charges. If you didn't use a mortgage broker and went direct to Britannia then you take on the liability for checking your details.

reformedEffortMaker_2

I didnt use a broker for my Britannia application so from what you are both saying, I would be fully liable. I am so annoyed, as I will end up paying the equivalent of a months payment to Britannia with no benefit to myself! and still wont have the security of a fixed rate

herbiesjp

Some of the Woolwich products have a switch facility which allow you to go onto a current fixed rate without penalty (paying relevant fee though) - you may want to ask them if this is a feature of your current deals

reformedEffortMaker_2

well now im confused, i just rang up to try and speak to my mortgage advisor@barlcays but he is on leave. His colleague answered and said that there is no logical reason why the time period for which I was liable to pay the ERC should have changed from the issuing of my KFI to Mortgage Offer as the product hadn't changed.

based on the replies above, i'm not holding my breath, but still going to have a go-thanks anyway :-)

dunstonh

It is certainly worth verifying the information as Barclays may have made an error.

KTF

Do you still have the paperwork from the original mortgage? The ERC should be documented on it.

reformedEffortMaker_2

KTF wrote: »

Do you still have the paperwork from the original mortgage? The ERC should be documented on it.

I have absolutely turned the place upside down looking, (isnt helped by the fact that so many things are still in boxes!).

No is the simple answer. Last year I got a flyer in the post saying "your current rate is coming to an end, tick one of the following boxes stating what you want to do".

I picked Option 1 and still have a copy of that flyer, there was no mention of an ERC's at all on that. If I call Barclays/Woolwich again, are they likely to send me a copy of it?

KTF

They should have a copy of the original documentation on file so its worth a phone call.

dunstonh

all advisers are required to keep copies of the documentation they issue. This includes tied agents.

You should ask them to provide you a copy of the KFI as you wish to verify something that was on there.