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Remortgage and banking code
kotfw
Posts: 3 Newbie
Hi we have just tried to obtain a remortgage from our existing lender (Abbey) and have been told that the mortgage we have and when we took it out it is not covered under the FSA but only under the banking code. If we were to try and remortgage and were unsuccessful then we would be tied into Abbey for a set period (depending upon the time we did it)
They advised that we should apply for the additional amount requested (we wanted to go from £60k to £110k) then re negotiate the whole amount if accepted.
This sound to me like total rubbish and I smell a con, can anyone advise and is what they have said in breach of any FSA rules?
Many thanks in advance.
They advised that we should apply for the additional amount requested (we wanted to go from £60k to £110k) then re negotiate the whole amount if accepted.
This sound to me like total rubbish and I smell a con, can anyone advise and is what they have said in breach of any FSA rules?
Many thanks in advance.
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Comments
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You need to understand what you have been told. Your existing mortgage is not regulated by the FSA, as it was taken out before the new regulations. If you take an additional loan on your existing mortgage then that new loan has to be regulated. It is not possible to have an unregulated loan with a regulated loan on the same account. Therefore, your existing mortgage will be 'ported' to make a new regulated loan of the higher amount which will include your existing mortgage and the new loan. You can then choose a new deal for your whole mortgage which may (depending on the package deal chosen) tie you into Abbey for a period of 2, 3, 5 or longer, or infact there are deals that don't tie you in at all.
To do a Remortgage, this would mean taking your mortgage to another lender ( you cannot remortgage with the same company) and that new mortgage with another company would be 'regulated'.
It is good to have a 'regulated' mortgage as if things go wrong, you have some comeback.
I'm sorry if this sounds complicated, it's not really, it just sounds it. Best thing to do is go into a branch and speak 'face to face' with a mortgage advisor who will explain things to you properly in detail. Then you can choose whether to take the additional borrowing with Abbey - at the same time as getting a new deal or you can choose to remortgage to another lender.
Hope this helps.I am a Mortgage Adviser
You should note that this site doesn't check my status as a Mortgage Adviser, 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.0 -
Not sure what the issues are, but a copy of The Banking Code can be found here:
http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=3470 -
Jill2002 that makes it a whole lot clearer than the person we were speaking to. Thanks so much
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