ERC - told it was waived but not

Jduncan24615 · 25 June 2019 at 6:38PM

So we have been in the process of selling our house and getting a new build house. When we contacted our lenders they advised us that they could port our mortgage to our new build house. We advised them that we intended to sell in middle June and the house isn’t available until September/October. We also got them to re-assure that we would be mortgage free between these times and no ERC payments - which they confirmed.

So the house has settled this week and our solicitors have received paperwork with the ERC in it - even though over the past 2 weeks I have asked the lenders several times and kept getting re-assured of no ERC.

So I contacted the lenders who were surprised we sold this week and as the new mortgage doesn’t kick in until September, we have been told we have to pay the ERC.

What are my options here? Do I have enough to hold them to no ERC as surely the correspondence and recorded phone appointments will prove this?

Can I take my mortgage before the house officially completes to avoid the ERC? And ideally put the money towards my mortgage rather than charges?

Or do I need to pay it?

[Deleted User] · 25 June 2019 at 6:48PM

If you have the correspondence and recorded the calls confirming this, use them in support of your complaint. You may get lucky and they'll waive it.

You won't be able to get the mortgage early with no collateral to secure it on.

LRmortgage · 25 June 2019 at 6:49PM

Did they put in writing that you wouldn’t pay the ERC?

Either way, you could put in a complaint to them, ask them to check the recordings of the conversations you had with their employees.

You cannot take the mortgage before completing the new purchase, the mortgage loan is secured against the property and you cannot offer that security until you own it.

haras_nosirrah · 25 June 2019 at 6:49PM

Normally in the circumstances of a delayed completion you would pay the erc and then if you complete on the new property within a set timescale (3 months normally but check with lender) it would be refunded to you as long as the rate is ported

Jduncan24615 · 25 June 2019 at 6:53PM

Thanks for the info so far. It’s barclays I’m with. I emailed them at 10:00 and they conveniently got back to be at 18:10. Immediate reply and Out of office on by 18:11

They have been to our development site several times so knew the completion date wouldn’t be until September and October. And like I’ve said they knew we were selling this month.

It sounds like it’s going to be a bit of a battle to get out of this ERC

Thrugelmir · 25 June 2019 at 7:11PM

Jduncan24615 wrote: »

It sounds like it’s going to be a bit of a battle to get out of this ERC

Difference between waived and refunded. Once your current property is sold and the mortgage discharged. There's no tie to the lender. You could simply not proceed with the new mortgage you've applied for. Instead moving to a different lender. Leaving the existing lender out ot pocket.

haras_nosirrah · 26 June 2019 at 5:54AM

As I said chances are if you complete within 90 days it will be refunded to you.

If you don't then it is gone

They do it this way as then they have control. It is easier for them to refund ercs from people who successfully port within the timescale than it is to chase and get the money back off those who don't

If you complete within 90 days (so if completion is today that would be 24th Sept) then you will get a refund. Miss the date and you won't

kingstreet · 26 June 2019 at 8:21AM

Jduncan24615 wrote: »

They have been to our development site several times so knew the completion date wouldn’t be until September and October. And like I’ve said they knew we were selling this month.

No. An independent chartered surveyor has been to the site.

The date of the sale will not be known to Barclays until your solicitor requests a redemption statement and the completion date of the purchase will not be known to them until the solicitor submits the certificate of title.

Jduncan24615 · 26 June 2019 at 9:54AM

We had already accepted an offer when we had the initial phone appoint and they were always aware of the mid June selling date.

We had always advised them of late September early October entry and they never thought to mention the 90 day deadline or the mortgages taken out simultaneously.

Had I know about the 90 days I could have pushed back my house settlement date to meet that requirement but was never advised of it

haras_nosirrah · 26 June 2019 at 10:10AM

I have looked at the criteria

You pay the erc when you redeem the old loan
If your new mortgage starts within 90 days it is refunded
If it doesn't complete within 90 days you lose the erc and also you lose the rate and have to choose a new rate from the available range at the time for the ported bit.

Jduncan24615 · 26 June 2019 at 9:39PM

So little update

Complained a lot today and escalated to a senior manager. They listened to the initial 1hr phone mortgage appointment and they never mentioned the 90 day deadline on the porting of mortgage. And on repeated email correspondence about the ERC the 90 days were never mentioned. Even though it was in the paperwork conditions, when I queried the charge I was always told it would be waived - again no mention of 90 days.

She apologized repeatedly and they will resolve the issue this week.

The argument I put forward was that if i knew about the 90 days I would have held onto my house to ensure I met that deadline. They agreed.

ERC - told it was waived but not

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