Mortgage rip off

Muffinm4n

Hello all

I moved into my property on 29th February (after 10 months since our offer was accepted) and when I opened the post that had been addressed to the new property I discovered a letter from my mortgage lender, Amber.

This letter stated that they had increased my mortgage rate by 0.25% without my knowledge. I had agreed to a two year fixed rate but now they've done this without my knowledge or agreement.

I've got my solicitors looking into it but does anyone know if this is ok or even legal?

If I had know the rate was so high I would have looked elsewhere...

Thanks

AndrewSmith

Read very carefully the conditions of the mortgage offer in conjunction with the exact wording of the letter.

You may find that, as it has been 10 months since your offer was accepted, your original mortgage offer had expired and had to be re-issued from the current product range. If you used a broker ask them if this is what happened.

Also double check that you have a fixed rate and not a base rate tracker or discounted rate.

dunstonh

Have you asked Amber?

Before you start getting any third party or legal team involved and incurring costs for doing so it is always best to check your offer letter as that is your terms and conditions of the borrowing and ask the lender themselves.

My "guess" on this is that the deal you originally agreed expired. Fixed rates have to be advanced by a certain date. Typically they are issued for periods of 3 months. You say 10 months since your offer was agreed which probably allows for 2-4 deals being issued and withdrawn. When this happens, new offer letters are required so you solicitor should have a copy of this on the file (if you used the solicitor to read through the offer letter (which is always recommended) which should confirm that you signed and agreed these terms.

If I had know the rate was so high I would have looked elsewhere...

Amber tend to deal with lower quality lending (or did before they pulled out of mortgage new business). Lower quality lending, also known as sub prime, does tend to be more expensive due to the higher risk involved. Plus rates have increased a little over that time period.

edit: Andy just beat me to it

Muffinm4n

Thank you both for this. During the 10 month period the mortgage offer had to be renewed twice (the last time was in December). There was no mention of the increase then but their letter simply says:

"As a result of recent changes in the rate of interest, the rate on the above account will be changed ....."

I checked my account this morning and noticed they have debited this for the initial agreed amount but only 5 days after the move. Someone told me it's usually a month before you make your first payment...sorry first time buyer and new to this...:rolleyes:

dunstonh

Someone told me it's usually a month before you make your first payment...sorry first time buyer and new to this...:rolleyes:

It varies with lenders. There is no set method.

Did you use a mortgage broker? If so, I suggest you contact them as they will have copies of all relevant paperwork (such as the contract details) and they should have let you know how the payments are made (although if it was closer to 10 months ago its possible they did and you forgot. There is so much to learn as a first time buyer that you cannot take it all in).

Muffinm4n

very true - do not move unless you absolutely have to :rotfl:

Trying_to_be_good

Not a broker, but just applying common sense - do you have the offer that you actually took up (I've read that this was renewed a number of times)? That paperwork should make REALLY clear what the interest rate is, what the repayments will be during the fixed rate period, when the first payment could be taken and what amount that would be (although the latter two are always dependent on when the mortgage funds are actually advanced - the last time I remortgaged this was only confirmed by letter after the mortgage has started).

Treadmill

It may have something to do with Amber not lending to any new customers while they "Reposition" in the market as it says on the website, this may well involve squeezing an extra 0.25% out of existing punters.

Muffinm4n

I tihnk they are trying to squeeze me for this. I've checked all paperwork and there is no mention of an increase in the renewed mortgage offer. The first I knew (or even my solicitors knew) was the letter I received on the day I moved in.

I'll let you know if I hear anything but thanks for the advice :T