so an almighty cock up on friday when we were supposed to exchange, nobody told us the full lending amount on the mortgage agreement would have to be borrowed, we assumed we would just say we need £xxxxxx before the money finally got moved across.
can't believe nobody said "so how much do you want to borrow?
so we can pay back 10% of the excess funds as soon as the mortgage starts fee free and it looks like we have to pay 3% on what's left which is annoying but affordable, what isn't so good is having monthly repayments if the they stay the same despite overpaying.
this will put the whole purchase in question, T&C's and offer document are not very clear just mention they might not lower payments not 'will not'
so anyone shed any light on this? found info for other banks but not samtander and broker is away over weekend. we have to make a decision monday morning and there is no time to go to santander as it takes 5-7 days to amend offer and the sale/purchase will fall through if we delay any more.
any anecdotal experience appreciated.
Last edited by MrSmith; 7th January 2023 at 21:14.
With my Lender I have 2 choices, if I overpay. I can reduce the regular monthly payments or leave it as is and simply pay a chunk off the capital amount owed thus reducing the amount of interest paid over the term.
Maximum over payments on my mortgages is 10% of the original amount borrowed in any 12 month period.
I would have thought that you would have the same options as standard?
I’m with the Halifax
B
Sounds like you will need to take the full amount and swallow any early redemption penalty for excess.
Sorry to be brutal but I’m not sure why you thought you could drawn down any amount you choose. I’ve not heard this before unless it was a specific draw down mortgage.
Are you sure you can’t try and delay a bit longer
Last edited by awright101; 7th January 2023 at 21:25.
Having just moved myself I’m intrigued how this situation came to pass - did you end up receiving more for your property or paying less for the new one at the last minute? I presume you’re not adding any savings to the purchase etc? Our finances were very clearly outlined and agreed pretty early in the process.
I can’t see any other option beyond accepting the additional amount and living with any excess costs. If it’s not loads I can’t see it’s worth threatening your exchange
Presumably you won't have been the first mortgage customer in this position, so open discussions ASAP with the lender. However, your broker appears to have some questions to answer.
Is it feasible to place the excess in a high interest account (or at least as high as is available) and draw down on it to top up your monthly mortgage payments over/above what they would otherwise be? Thinking off the cuff, I think your loss be the difference between the interest rates payable and receivable.
I'm surprised this was able to happen. Normally once you get approved for the mortgage the mortgage provider comes out to value the property and will only lend what they think the house is worth? I guess if you have a decent deposit this enables sufficient room for this to occur.
If monthly payments stay the same term will reduce. That's probably the default.
Highly likely you will be able to change this with a mainstream product.
Appreciate its a stressful time, but I wouldn't be overly worried.
Also see if you can change the principal amount as 3% early redemption fee will be punchy.
Get on to your broker. Iis in nobody's interest for a deal to go south over this. Your vendor will likely be understanding, won't want to lose a buyer in a potentially falling market
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lender will take 5-7 days we simply do not have the time, there isnt much to be gained by sticiking it in an account and then taxing it.Originally Posted by Halitosis
we will use some of the funds to top up the monthly payments and bring them back to a level they should be without this issue and stick the rest in premium bonds. this is assuming overpaying will not bring down the monthly payments.
it was based on the agreement in principle, we had several forecasts done with different levels of refurb costs but didn't know we had to commit to a figure at a certain stage and were never asked
we can't delay, well we could try but our seller has threatened to put it back to rental if we didn't exchange,
it not a draw down mortgage (no idea what that is) just they have gone to the agreement in principle max amount.
as above, we were porting and wanted to refurb but had a fair bit of equity.
I’m not totally clear on your situation, but it reads like the offer in principle from the building society has been used for the application not the amount you want.
Lenders are current keen to lower the amount as it improves their credit risk data ( Loss Given Default and Probability of Default). It’s important the property valuation used in the application is correct otherwise the Loan to Value ratio must be reassessed and may delay the process.
Personally I’d check the early repayment penalties and fees.
Conditional exchange on £1 while the mortgage offer is retyped for 5-7 days?
I'm not sure I get the situation.
Are borrowing more to move but not selling your house or a FTB? Otherwise why do you need to borrow the full value?
You should look around for a better alternative and cancel the existing deal.
Brokers, who need them?
My thoughts exactly. Was a broker involved?
On holiday of course.
Not sure if this is a typo but can you not pay 10% of the initial loan amount (not the excess)
Would a solicitor not of confirmed the amount you wanted to borrow
A good broker can be extremely valuable for a few reasons, especially if your situation is not “standard” (ie self employed etc). The broker I used was great when we had some major issues with the mortgage company themselves; he had a route unavailable to us for contact etc. A big plus
thats exactly what has happened.
we assumed it would be possible to say how much of the money available we wanted to borrow, they knew we were planning some works and even if we did everything (bathroom/kitchen/insulation etc) we still didn't need all of it.
I think it's solvable but no definitive answer until monday morning, the mortgage on the property will be in 3 parts, 2 ported products and the new lending at a higher rate. I presume you can nominate which part you overpay on and it's not spread across all 3, you cannot find this info on the paperwork but be surprised if it's not on the case.
this whole thing hasn't been helped by an atrocious solicitor who has done their utmost to cock things up for us.
i'll post on monday if/how this gets resolved.
Sounds pretty complicated. Good luck tomorrow I’m sure you’ll manage to get it sorted
I have a mortgage with Santander here are my experiences with overpayment
I can pay up to 10% of the total loan amount in any one year without any penalty
If I do make an overpayment I have the option to either have my monthly payments reduced or to keep them the same (& reduce the mortgage term), but I have
to specify which option I wish to use everytime I make an overpayment.
My understanding is their default position is to reduce the monthly payment not the term
I wouldn't bother going into a branch to try to sort this out, on the 2 occasions that I have tried to make mortgage adjustments in branch they have directed me to their phone lines, even
making the call from the branch for me and then handing the phone over!
On both occasions the telephone assistance was very good whilst the in branch lakc of knowledge of their own products was astounding
I hope this helps, good luck
John
I hope you get your situation sorted to your satisfaction, sounds like the lender just assumed you'd be wanting the offer in principal amount without actually checking with you.
When I bought my new place in 2021 I found mortgage accounts with zero penalties for overpayments, lump sum payments or redemptions are few and far between. The only one I could find with absolutely no charges was a tracker with HSBC.
They've created a niche for themselves. If they didn't exist mortgage companies would have to be better at dealing with 'non-standard' cases and the whole system would be simpler (and cheaper too w/o brokers taking a slice of the pie).
Or mortgage costs would go up
For the majority as lenders need to up skill and recruit brokers who can deal with non standard cases. Being self employed and also having nonstandard tenancies (eg letting to Housing associations ) a broker is invaluable to me.
Odd one this, as the mortgage offer must have required signing and the numbers would be on there. I don't see an issue. Just call them tomorrow.
And lenders rely on their intermediary network of brokers. Their direct business is not enough. That's not an opinion, it is fact.
I really don’t get how you can get this far down the line and not know how much you’re drawing down, it’s on the Key Data sheets , the mortgage offer etc
Simpler and cheaper!? Haha good one.
Whatever.
I'd suggest if the seller is going to throw their toys out of the pram over a 1 week delay, perhaps that's their problem not yours.
Can become his problem too. The current house I bought in 2016 was part of a 7 person chain. (The most stressful experience I've been through) we had to exchange and complete within a week as my mortgage offer was going to expire had it been delayed. Would have meant having to reapply all over again and starting again - which could have caused delays and broken then chain all over again.
I’m with
I’m with santander and my repayments are automatically reduced every time I make an over payment.
The 3% over payment charge (above the allowed 10%) is only on the over payment so if you overpay by £1000 per month then it’s only an extra £30 per month.
It’s worth doing the calculations as to which is most cost effective way of paying the extra off though as you could just pay 10% p/a extra off without charge.
Finally, as you are exchanging rather than completing today, you have up to a month before completion to get the mortgage figures amended.
So it's all sorted (well almost) and we exchanged.
while waiting for the zoom call from broker we rang santander and they said that the overpayment could come off any of the 3 component parts of the mortgage.
Broker was surprised at this and said to make note of the time of the call as it could come in handy later.
we ran the numbers and even if the fee free 10% overpayment is spread across the 3 parts of the mortgage the following 3% fee paying overpayment can be nominated to any part of the mortgage so we can put that towards the unwanted borrowing with the higher interest rate.
Overpayments can reduce the monthly payments and it's daily interest so as soon as you do so the lump sum overpayment the monthly payment will come down, you can even move the money on the day of completion or the day after.
if we are lucky and can overpay fee free the 10% on the extra borrowing with the higher interest rate this cock-up will only cost us £400 and it's bearable if that's not the case.
thanks for the anecdotal santander input, did help put us at ease over the weekend before we could speak to anyone.
(will update again when we do the overpayments)
Good work and glad to hear you got it sorted and exchanged! Enjoy your new place!
Sounds like a good result. I hope your very happy in the new place.
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