We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Remortgaging issue - interest only part

Options
Harpderi
Harpderi Posts: 7 Forumite
edited 24 June 2018 at 6:36AM in Mortgages & endowments
First post but looking for some advice. Our 2 year fixed rate with the Halifax came to an end end of April. When we started the loan it was a total of £184,000 made up of £50,000 interest only and £134,000 repayment. At the end of the fixed rate period, we made a large overpayment to bring the total owed down to £100,750. Of which £47,000 was interest only. Term remaining is 11 years.

We then tried to get a 5 years fixed rate with them but they would not let us do this - reason given was because they were not happy with my method of repaying the interest only part. I have pensions currently with a combined value of £375,000, one a final salary scheme which has a transfer value of £195,000 and the rest is in a current one I am still contributing to.

I get paid in US dollars which complicates things slightly but house is in UK and both my pensions are UK ones. Issue they say is that they do not accept my final salary pension paperwork I sent in as proof of being able to pay back and they are only using £28,000 from my other pension as being acceptable. I have sent in the print out of the pension statement (problem one) with lump sum value etc as well as a letter from the pension administrators but they still will not accept it. Pension people have they have sent all they can and cannot send anymore.

I therefore officially complained to Halifax and within one week we got a letter back from them apologising as well a cheqe for £750 for the shocking treatment we got (they made two obvious technical errors on our account and gave us contradicting advice) but hey also said we could not go on the 5 year fixed rate as their interest only team would not accept our paperwork. The lady also stated on the letter was that she had tried to convince he interest only team at Halifax to accept our application but it was still denied.

I should add that in the weeks before our fixed rate was ending, we got a letter from Halifax asking how we were going to pay off the interest only part and phoned up nd talked to gent. I told him about my pension, the values and the companies they were with - he said they were acceptable. Therefore it seems - sticking to their SVR, no thorough checks, over the phone will do it, going on a lower interest fixed rate, all the interest repayment evidence must be supplied and on the correct headed paper etc etc.

Seriously considering contacting the ombdsman to complain but not sure if It is worth it? Any advice? - note, I am not looking for any more compensation,only a lower than the current SVR 5 year fixed rate.
«1

Comments

  • anselld
    anselld Posts: 8,634 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Why can't you just move the whole lot into repayment?

    It is not straightforward to access the transfer value of a FS Pension so it seems right they would reject that as a repayment vehicle. Besides, you will need a pension.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 24 June 2018 at 9:19AM
    Harpderi wrote: »
    First post but looking for some advice. Our 2 year fixed rate with the Halifax came to an end end of April. When we started the loan it was a total of £184,000 made up of £50,000 interest only and £134,000 repayment. At the end of the fixed rate period, we made a large overpayment to bring the total owed down to £100,750. Of which £47,000 was interest only. Term remaining is 11 years.

    Why didn't you make the large overpayment totally against the interest only part?
    only a lower than the current SVR 5 year fixed rate.

    Switch the entire balance onto repayment. Or seek an alternatively lender.

    Seriously considering contacting the ombdsman to complain

    Lenders are free to set their own commercial terms of business. Remember they too have regulators overseeing their practices. You've no winnable grounds for complaint.
  • amnblog
    amnblog Posts: 12,727 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    When borrowers with interest only elements seek a product transfer the lenders requests a full update on the position of the borrower.

    Even if the borrowers does not meets today!!!8217;s criteria for the borrowing, Halifax seem to be comfortable where the borrower today meets the criteria from when they took the loan.

    As borrowers we regularly do these cases and Halifax agree the switches.

    Presumably they will let you switch if you switch to repayment? Hence they are not denying you the rate.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Harpderi
    Harpderi Posts: 7 Forumite
    edited 24 June 2018 at 12:41PM
    anselld wrote: »
    Why can't you just move the whole lot into repayment?

    It is not straightforward to access the transfer value of a FS Pension so it seems right they would reject that as a repayment vehicle. Besides, you will need a pension.

    I cannot transfer it all to a repayment mortgage as I get paid into a USA bank account in US dollars and this cannot be changed. We tried but they said we had to do a full affordability test with 3 months wage slips etc - they would not accept my wage slips due to currency and location.

    This is one of the reasons why we got the £750 cheque and an apology as one of their phone agents told me they could whilst the next one said they could not. When the fiirst agent we talked to said we could we then made big overpayment into the repayment part of mortgage and not the interest only part as we were told it would be a simple process to transfer to a new mortgage as long as we were not increasing the amount borrowed.

    Also they did get the transfer value of the pension officially from the pension company and I still would have £330,000 left in my pension pot if I was to pay off the interest part only.

    So I am unhappy as they are quite willing to accept a phone conversation verbally telling them what I plan to use as a repayment method for the interest only part when going onto their higher interest SVR mortgage after fixed rate finished but they need full documented evidence for going onto a cheaper fixed rate one. If I had got the fixed rate, when that expired I would still have 6 years on probably a SVR rate - would that need same method of repayment evidence then and if not, why not?
  • minimike2
    minimike2 Posts: 2,210 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    The whole product transfer on I/O with Halifax is farcical.

    Recently went through the painful journey myself, so will share and hopefully it helps.

    The person dealing with my application told me that they would NEVER deny a rate switch onto a cheaper product when I questioned why they were going to such lengths just for a new product. If they do deny it, regardless of if you fit criteria either now or at the time of the application, then I believe they are breaching outcome 6 of TCF (imposing post-sale barriers), which you may wish to cite to them / the FoS if it goes that far.

    In my case, my repayment method was not recognised as something they accept and they assessed me for affordability on a repayment basis. I met the affordability but they allowed me to swap the rate and stay on I.O with the repayment vehicle which I had stated, despite this not meeting their current criteria but only after a long and painful discussion and lots of paperwork.

    I pushed for more info on why they require a full application and payslips etc and she cited FCA regulation - I pointed out this is NOT a requirement for them to do this and there are lenders who allow an I/O rate switch non-advised online and she backtracked.

    This is when we got into the discussion of "what if I now had no income" and "what if I was now not able to afford the mortgage on repayment" and would they allow me to change the rate, and she stated that they would never not allow a customer to swap the rate and that the process was just to make recommendations to swap to capital and interest if needed.

    It also seems that when it came to asking about outgoings, I could have made up anything, as they do not carry out a credit search or take bank statements, it is just pay they ask for evidence of.

    I know why they are doing it, because they were reckless and now trying to cover their backsides, however refusing to allow changes to a cheaper product because "you cant afford it", is quite frankly criminal.


    If you have a final outcome to your complaint and they are not allowing the product transfer then please take it to the FoS and report back with your outcome.
  • Lysimache
    Lysimache Posts: 195 Forumite
    Part of the Furniture 100 Posts Combo Breaker I've helped Parliament
    What stops you converting the dollars from the US bank account into a UK bank account and then paying off the interest only amount?
  • Harpderi
    Harpderi Posts: 7 Forumite
    Lysimache wrote: »
    What stops you converting the dollars from the US bank account into a UK bank account and then paying off the interest only amount?

    Well, this is what I am doing with overpayments each month. The large amount of dollars I did have saved have already been converted into UK pounds and used to pay off a large part of the repayment part of the mortgage (as explained in earlier posting).
  • Nebulous2
    Nebulous2 Posts: 5,666 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Harpderi wrote: »
    Well, this is what I am doing with overpayments each month. The large amount of dollars I did have saved have already been converted into UK pounds and used to pay off a large part of the repayment part of the mortgage (as explained in earlier posting).


    You haven't explained why you did it that way though. Given everyone is so twitchy about interest only, why didn't you make the payment towards that?
  • Harpderi
    Harpderi Posts: 7 Forumite
    Nebulous2 wrote: »
    You haven't explained why you did it that way though. Given everyone is so twitchy about interest only, why didn't you make the payment towards that?

    If you had properly read my original posts you would have noted my explanation. When I first called up Halifax, the original agent said it was just a formality to get the new fixed rate and there would be no issue. Based on this, I used all our recent savings to reduce the repayment part of mortgage thus reducing monthly payments by a higher amount. The agent I called up to do the change said first agent had given wrong advice.

    Halifax have already apologised to us for giving us the wrong information and supplied us with a cheque for £750 because of their error.
  • anselld
    anselld Posts: 8,634 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Harpderi wrote: »
    If you had properly read my original posts you would have noted my explanation. When I first called up Halifax, the original agent said it was just a formality to get the new fixed rate and there would be no issue. Based on this, I used all our recent savings to reduce the repayment part of mortgage thus reducing monthly payments by a higher amount. The agent I called up to do the change said first agent had given wrong advice.

    Halifax have already apologised to us for giving us the wrong information and supplied us with a cheque for £750 because of their error.

    The bold part is the explanation that was missing from your original posts. It was a fair question.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.9K Banking & Borrowing
  • 253.1K Reduce Debt & Boost Income
  • 453.5K Spending & Discounts
  • 243.9K Work, Benefits & Business
  • 598.7K Mortgages, Homes & Bills
  • 176.9K Life & Family
  • 257.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.