Nationwide going back on their word about ERC - Please help

ninjacat_2

Hi everyone,

We are quite stressed about a situation with Nationwide. I will try and break it down as best as possible and hope you can advise.

My fiance has a shared ownership flat. I also have a shared ownership flat. As we bought them before we met and now are living together we decided to sell his flat and use the money to buy mine 100% (known as 'staircasing') so that we don't pay rent to the housing association anymore and instead put all our money into a mortgage.

We looked into this and had an appointment with Nationwide in September. Our main concern was my boyfriend's Early Repayment Charge which is over £4,000 on a fixed 4 year mortgage. His mortgage expires in June this year and we were told that borrowing more would come under a new mortgage (as with Shared Ownership, my initial mortgage would still stand) and so would count as an 'additional product'. Taking out an additional Nationwide product in the last three months of his mortgage exempts him from the ERC, we were told and is stated in his mortgage terms. We also have this in writing after the advisor checked with Nationwide head office to be sure.

Now we are well through the process of selling his (completion in March) and have invested in buying mine (valuation, admin fees, solicitor deposits). We went to apply for our decision in principle with another Nationwide advisor and upon application she said the ERC still stands. She says the mortgage counts as porting and so not a new product. My fiance explained that it is not porting and that also we were assured by Nationwide that we are eligible for the ERC to be waived.

The advisor has checked with head office who say that the initial advice was wrong so we have to pay the ERC. We are obviously very shocked. We had no reason to sell when we did except that we were told that we meet the criteria for not paying the ERC. We could easily have waited a couple months more. The situation is incredibly immoral and unfair with Nationwide going back on their word.

We would very much appreciate advice on what our next steps could be.

Thanks very much.

mrginge

Have you raised a formal complaint?

ninjacat_2

Hi mrginge, no we haven't. We are currently emailing the advisors back and forth. Would a formal complaint be the next step?

Thanks for your help.

csgohan4

ninjacat wrote: »

Hi mrginge, no we haven't. We are currently emailing the advisors back and forth. Would a formal complaint be the next step?

Thanks for your help.

if you have written evidence, then a complaint is the way forward and concluded if they waive the ERC at least as agreed.

getmore4less

Do nationwide charge ERC on porting.

Your mortgage will need to change if both now owning and it was just you before.

What rates are on offer.
Is porting rate better or worse than additional borrowing?

TrickyDicky101

Ask your adviser (the one telling you ERC needs to be paid) how you raise a formal complaint. It will concentrate minds wonderfully and will at least get you more progress than emails bouncing back and forth. Like you, I would be extremely annoyed.

ninjacat_2

Thanks for your response. The formal complaint has now been made. Both the new advisor and our initial advisor say there is nothing they can do about the situation.

It's really unbelievable. I would immediately leave Nationwide except then I'd have to also pay an ERC. It almost looks as if they did this on purpose to ensure they got a whopping big fee and so deliberately gave us the wrong advice.

Marshyman

the 3 month ERC waive is for when you are switching from one product to another and are in the last 3 months of your current product. You will however be able to pay the mortgage off in the last month of a product without ERC

nicholbb

http://www.nationwide.co.uk/support/support-articles/manage-your-account/mortgage-early-repayment/early-repayment-overview

Look at above, seems like you fall in last 3 months of mortgage and you would be taking over all mortgage so as long as you exchange on same day you avoid.

Iwent through similar but with Halifax and being told no after selling house. Not sure what changed their mind, their 'solution' was to give me what I'd asked for and expected to happen.

I had 2 mortgages, first 3 year left fixed, other 4 month left of fixed. These were ported at the same interest rate with same amount of term (+ 2 months spent getting new place). I then had a tiny 10k third mortgage.

Are they actually saying not eligible to borrow more as can't afford it? a solution will be to port the mortgage and buy back as much of your house as possible. Speak to housing association to see if will allow 2 quick stepups with same fees/valuation. When ends in June go to a different lender and borrow the full amount (+max you can pay off your mortgage).

Another option is to tell buyers sorry can't move till June, see what they say. Explain everything honestly.

haras_nosirrah

The problem is you can only port to a new property you are buying. As the other property is already owned so you are remortgaging not buying a new house. You can't port to a property already owned. If you have it in writing you have a good chance of getting some redress but the second advisor is right and the first one was wrong

getmore4less

the whole thing is non standard.

2 mortgages 2 properties/part owned in individual names

Selling one and using the equity/mortgage to staircase the other into joint names.