Can NR charge us £1000 for moving elsewhere?

Mad_about_Money

Hi - First post so please go easy on me!!:D

Wondered if anyone could help me. We have been with NR for a good few years and moved home just under 2 years ago.

However, we now need to remortgage as our house is worth far more than we bought it for and we want to add to our mortgage using the extra equity. Obviously NR told us to "go elsewhere" to do this and so we asked for a redemption statement from them. The blooming cheeky blighters have had the nerve to ask for £1000 back from us for Help with Costs as we are ending our mortgage deal with them earlier than 3 years (I'm assuming when we moved house we must have struck up a new deal that gave us £1000 as long as we stayed with them for a further 3 years which obviously at that time we had no problem with!! ) The only reason we're ending it with them is cos they told us to literally "take a hike" so why are WE having to pay back £1000 when we didn't even want to have to move to a new lender in the first place???:mad:

Does anyone out there know if they are legally allowed to charge us this £1000 considering we are moving due to their problems?

Many thanks for any replies (Have also posted this on the NR thread but thought I would put it up seperately incase it didn't get seen so apologies for duplicate post!)

homer_j_3

The help with costs (hwc) option would have needed your agreement to take it as NR products in the past had 2 deals for heach product normally - one with the hwc on and one without.

The terms and conditions are there to say that if you move within a period of time then these must be repaid.

There is no way around it and I dont believe NR would be looking to waive theses things because they owe the tax payer a lot of money and they need to get that repaid.

minimike2

Ive had three clients recently try to get them to waive the HWC and the answer was no every time.

Mad_about_Money

Thanks for your advice....even thought it probably wasn't what I wanted to hear!!

Could I get around this by, say, keeping my mortgage open with a couple of hundred pounds - as suggested by Martin somewhere on this site? It seems like one way of getting out of these exit fees.;)

minimike2

No, you cannot have two "first charge" mortgages running.

Mad_about_Money

minimike2 wrote: »

No, you cannot have two "first charge" mortgages running.

Not sure what "first charge" means, could you explain please?

If this is the case, then what was Martin Lewis talking about when he mentioned this on the site about keeping your mortgage open with, say, £50 rather than closing it thus saving on exit fees? Was this something completely different then?

minimike2

This is for people no longer requiring thier mortgage that you are talking about

Basically a first charge is like a normal mortgage, the money you use to buy your home. Second charge is if you take a loan with another lender, a home improvement loan for example. Because your original morgage lender was there first, they hold the "first charge" on the property - i.e the security. The new lender, or the second lender, holds a "second charge" - so they are second in line for the rights to the security.

If you do not fully redeem the mortgage, then NR will still hold the "first charge" on the property. So you would not be able to go to another company to get your new mortgage (unless you got it on second charge, but that would be pointless....the costs are way higher than a first charge mortgage)

dunstonh

Not sure what "first charge" means, could you explain please?

In very simple terms (possibly oversimplified but it will serve the purpose), only one lender can have the first charge on a property. They have first call on the property. Every lender after that has second, third etc. So, if you get into negative equity and repossessed, the first charge lender gets the mortgage repaid but there may not be enough to pay the second or third.

The mortgage providers will want first charge only unless you start going to higher risk lenders (with higher rates).

If this is the case, then what was Martin Lewis talking about when he mentioned this on the site about keeping your mortgage open with, say, £50 rather than closing it thus saving on exit fees? Was this something completely different then?

Something completely different. Martin was referring to deeds release fees or the redemption charge.

You took a deal with NR and now want to take the mortgage away from them in the tie in period. So, NR are saying we want the deal money back as you are breaking the contract. If you wait until the end of the tie in, you will avoid this charge.

considering we are moving due to their problems?

Not really. you are moving because you are making that choice. Their issues havent helped their rates but then there was never any guarantee that they would offer competitive rates in future.

The blooming cheeky blighters have had the nerve to ask for £1000 back

Its only fair. You took the deal and agreed the tie in. you now want to break the contract but keep the benefits of the deal.

That would be like going into a phone contract and getting a free of charge top of the range phone because you agreed the contract tie in but then saying you want to keep the phone but not pay the contract.

payless

They are not forcing you to move your mortgage.. only making it difficult to stay ( by either not offering a value follow on rate, or deciding not to let you increase you debt with them)

The original contract with them would not have committed they to either- but appears did commit you to the 3 yr tie

neas

I dont get what you are trying to do... oO

Your house is worth alot more... so you are trying to Mortgage Equity Withdraw?

I.e.

Houe bought for 200k...
Original Mortgage 200k

Now:

House worth: 300k
Mortgage: 200k
Miraculous Money Created From nowhere = 100k

So you want to remortgage to 300k in this example so you can get the '100k'

This correct?

Do you mind me asking what the money is for? Holiday? Fancy Car?

I mean houses always go up in value so theres no risk right? Reminds me of endowment mortgages lol.

maninthestreet

Wait another year (if you can), then re-mortgage when the 3 year tie-in has ended.