alliance and leicester rates

harryc_3

hi there , i was about to sign a two year fixed rate deal today based on a rate of 4.44%...and 295 arrangement fee ...

when i decided i would check thier site one more time just on the offchance ..guess what... the two year rate has now dropped to 4.24%..

I phoned them up right away to see what would happen if i had signed the paperwork would they automatically offer the new rate ..to be told no that if I wanted the new rate they would have to issue new paperwork for me to sign ...I asked what would happen if in the interim the rate dropped again , i was told that new paperwork would have to be reissued once again....

the saving of not signing and asking for the new rate is going to work out at about £150 over the two years ....

the question is what is the likelyhood of the rate dropping again in the next month... the advisor i spoke to would only say that the rate is looked at on a regular basis ....

cheers

harryc

simonkirkland

!!!!!!... We've signed our papers and just had our offer come through (via phone - awaiting the post)...

I'm going to call them and see what happens with this rate change... I haven't had any of their money yet so surely I should be able to get the new lower rate...

I make the difference as £14.18 a month on my mortgage (126k) which equates to £340 over the 2 yrs...

I don't want any more delays so I might end up staying with the higher rate if I have to... :-(

Simon

harryc_3

hi there I will confess i too was about to sign the paperwork and if i hadnt been checking for an email for the wife I wouldnt have looked at the all&l site this morn ...in fact I would have had the papers signed and away this afternoon ....

I am also somewhat disgusted with the response i got from the mortgage advisor when I phoned in essence they would have processed the paperwork based on the old rate even though they knew there was a better rate now on offer for the same deal ie the two year fixed rate...

if i bought a tin of beans I would expect to pay the going rate not necessarily the wrongly priced tin label price and would expect if it went through as wrongly priced that customer services would sort out and refund ....if asda can do it why heck cant the mortgage lenders !!

harryc

simonkirkland

I phone A+L and I can change to the new rate at this late stage for a fee of £195!!! - admin fee apparently!!!

I tried my hardest to get it waived and even threatened to move providers to nationwide but they weren't having any of it...

I decided to change as over the 2 years I would save £145 even though I have to fork out another £195 now...

It's also going to take 2/3 days and might not be till next week that I get my second/new offer paperwork...

At least now I will pay £15 less a month for 2 years and better I found it now than in a weeks time.... Grrrr..

Simon

MarkyMarkD

If you agree to buy a particular fixed rate loan, the lender commits themselves to lending the money to the money market at a particular rate (or at least allocates money they've already committed).

If, at a later stage, market rates fall, they will reduce the rates they charge to new applicants. That doesn't impact on the deals that have already agreed - the money's already committed. That's why there is a fee for switching products - not really (or entirely) for the admin involved in reissuing the offer, but to reflect the money the lender loses in closing out one deal and incepting another one at a lower rate.

Of course, in point of fact, the loss they make is MORE than the £195 - the loss to them is almost exactly the same as the amount you are gaining by moving to the newer product. On average £195 might work out OK but if you can save money by paying the £195, clearly they are losing money on that switch of products.

simonkirkland

It's still a con as if I had decided to leave A+L and go to another provider it would cost me nothing to leave... so there is no fee incured for not using the money they have been 'holding' for me...

Oh well at least I save money over the 2 yrs... :-)

Simon

Fairdo_2

Simon

Didn't you have to pay a Booking or Arrangement Fee?

This is something they would not be obliged to pay you back. This is the commitment they ask you to take in order to stop you switching just like that because you have found better elsewhere.

I have my axe to grind with A&L as they are renowned for pulling their rates without notice and stuff anyone who is posting the application to them.

I have been professionally embarrassed by them twice (only lender to do this even once in eleven years) and on the first occassion, I even offered to pay £95 for a courier to take it to Leicester and hand it in before the day was out and they still said no. On these occassions the rates were going upwards and costing a small fortune to go on the ammended rate. The first still went ahead on the inferior product and I doubt that she would deal with me again because she reflected it on me as an Adviser (even though I was going to have it couriered up).

The second time was a regular client of mine who went elsewhere because of it.

I would pay the additional fee if it saves you over the term.

As MarkyMarkD said, they take this commitment from you because they are reserving the funds on the money market and it will cost them more than it is saving you. So for tat alone, I would be paying to go to the new rate.

I would just hope they don't push the rate up again suddenly whilst your paperwork is in transit!!!!

simonkirkland

Thanks Fairdo, I hadn't paid any arrangement fee up front and they told me I could leave with no additional cost (I would have lost the valuation/homebuyers fee though so it was only a scare tactic)

I've swapped to the better rate and don't think I have to worry about a change in rates whilst waiting for paperwork as I don't have to sign anything again (apparently)... I suppose in the long run I have to be greatful as they could have said I can't change at all and then I'd have been £140 worse off...

I just hope they don't take too long with sending out the new offer... I was told it could be Monday or Tuesday next week but I'm still hoping for it by Friday and will ring later to get a progress report...

Thanks

Simon

payless

Most A&L fixed fees seem to be payable on completion

Arranged a couple of pre offer swaps without charge

harryc_3

I know its bizzness and that a&l arent a charity and are in it to make money

however the practice of putting the onus on the client to ensure that the rate hasnet changed between the date of offer and signing the paperwork ,

in my case from speaking to them by phone on monday morning to nearly signing the paperwork yesterday morning..... is morally wrong inmho.

It sure puts paid to any bull that they are a friendly ...there to help you ...sort of company.

as for the point that when they make an offer they agree to honour at that rate so are committed to that money , I just wonder how often mortgage lenders are the actual losers when rates go up , call me a cynic but me thinks that the odds favour them , since they set the rates .

cheers

harryc

Fairdo_2

harryc wrote:

I know its bizzness and that a&l arent a charity and are in it to make money

however the practice of putting the onus on the client to ensure that the rate hasnet changed between the date of offer and signing the paperwork ,

in my case from speaking to them by phone on monday morning to nearly signing the paperwork yesterday morning..... is morally wrong inmho.

It sure puts paid to any bull that they are a friendly ...there to help you ...sort of company.

as for the point that when they make an offer they agree to honour at that rate so are committed to that money , I just wonder how often mortgage lenders are the actual losers when rates go up , call me a cynic but me thinks that the odds favour them , since they set the rates .

cheers

harryc

Fair enough harryc

Maybe we should rephrase it to worse off relatively!

As for payless and Simon Kirkland, thanks for the info on fees. That shows how many times I have used them since I was professionally embarrassed by them!

Good, I'm glad you don't lose out on the fee if you threaten to leave them for another Lender.

Payless, I think that shows the sway you have with them to be able to negotiate the waiver of additional transfer fees. Upholds one of the benefits of using a Mortgage Broker!

I'm afraid that when they wrote to me pre-Mortgage Day stating that "Unless I provided them with at least 1 case per month, then they would review whether they accepted introductions from me"

I could have quite comfortably provided them with one per month if on the merits of their rates and service, they desreved it. However, I have let my clients have the choice (obviously explaining what they are capable of) and have not used them since.

Maybe that may change in the future, but I will not be held to ransom by putting clients with a Lender purely to fulfill their set quotas!

BTW I am not implying that Payless would be pandering to this in any way shape or form. I wholly envisage you are dealing with them by their merits and an existing relationship you have with them. Just to make sure there is no confusion.

However, I do not have that relationship with them anymore and I would rather not !!!!! myself or my clients to get back in their favour.

Hopefully I have enough of a range elsewhere to ensure I can give good advice and service to my clients.

Rant over.