Early rate change by lending institution

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BountyHunter

Registered User
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Hi guys and gals,

First time posting but have been an avid reader. So here's my situation, Started my mortgage in March 2006 on a fixed introductory rate for 2 years. Last Friday I recieved a letter from the financial institution saying the rate was over, I was very surprised as I wasnt expecting this until March 2008. I contacted the institution and was told that this product had a certain shelflife which has expired. I have contaced the institutions customer service looking for a more detailed answer and am waiting for a reply. Has this happened to anybody before?

BountyHunter
 
Re: Am I being ripped Off?

Am I being ripped Off?
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BountyHunter said:
Started my mortgage in March 2006 on a fixed introductory rate for 2 years. Last Friday I recieved a letter from the financial institution saying the rate was over, I was very surprised as I wasnt expecting this until March 2008. I contacted the institution and was told that this product had a certain shelflife which has expired. I have contaced the institutions customer service looking for a more detailed answer and am waiting for a reply. Has this happened to anybody before?
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What did the original loan offer/agreement say about how long the fixed rate applied for?
 
Re: Am I being ripped Off?

I have a letter from the mortgage broker saying it was for 2 years, apologies for the incorrect title :(
 
Re: Am I being ripped Off?

BountyHunter said:
I have a letter from the mortgage broker saying it was for 2 years, apologies for the incorrect title :(
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What the broker says isn't important. Its the loan offer from the bank you need to look at. It does sound strange though that just because they are ending an offer means that they end it for people already on that rate unless it really had come to an end and your broker was wrong
 
Hi there.Maybe this is a cynical attempt by the banks to reduce their losses as a result of the credit crisis? Many institutions are now "losing money" on certain loans. If they do this a hundred times, not everyone will query it as you are doing. If you have the original agreement and it states that the rate is applicable for 2 years then you should not back down. Maybe I'm being over cynical myself, but past experience of what banks can get up to with overcharging etc would make me worry.Best of luck
 
BountyHunter,

When you say "Started my mortgage in March 2006" do you mean you first drew down the funds in March 2006? Or was that your first payment?
 
John Rambo said:
Hi there.Maybe this is a cynical attempt by the banks to reduce their losses as a result of the credit crisis? Many institutions are now "losing money" on certain loans. If they do this a hundred times, not everyone will query it as you are doing. If you have the original agreement and it states that the rate is applicable for 2 years then you should not back down. Maybe I'm being over cynical myself, but past experience of what banks can get up to with overcharging etc would make me worry.Best of luck
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Thats exactly what I was thinking, my current rate is <3.4%
I'll have a look thru my agreement and check, thats if I can find it, the lending institution should be able to furnish me with a copy if I cant?

My first mortgage payment was in March 2006.
 
Sorry, my previous post was written in a hurry and not very clear.

A 2 year fixed rate would start from when the funds were provided to your solicitor to close the purchase of your house.
So, I suppose my question is whether you actually got the funds from the lender in October 2005 and took a "repayment holiday" at the start of your mortgage?

Your lender will be able to provide a copy of your loan agreement if you cannot locate your own.
 
BountyHunter said:
I'll have a look thru my agreement and check, thats if I can find it, the lending institution should be able to furnish me with a copy if I cant?
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They should be able to. If you cannot find your copy of the original loan agreement then put your query in writing to the lender so that they must give you a formal response - e.g. why is the rate changing now, what part of the original loan agreement/initial fixed rate period agreement allows for this etc.
 
Hi,

I didnt take any repayment holiday at the start of my mortgage, I moved into the house in March and first payment was at the end of March. So if for example the funds were provided to my solictor in October of 2005 to complete the purchase and I didnt take any payment breaks, where was the money until March 2006,thats 5/6 months, any ideas? I should really check this out with the solicitor, this does not sound logical to me to be honest...
 
As you took no repayment holiday, the funds will have been drawn in March and you made the first repayment in March. I can't think why a 2-year rate would not last to March 2008.
Your lender will be able to provide you with the details of the rate you were on and copies of any relevant documentation. Best of luck with your enquiries and sorry I can't be any help.
 
Happened to a friend of mine. Bank said that the fixed rate period started from when they made the mortgage offer, not when she drew down.
 
When mortgage rates started rising in 2005 some of the banks were offering certain rates for certain fixed periods of time.
To give you a real example we fixed with NIB for two years at 3.29%. That was the rate we were offered when we applied in Feb 2006, but by the time all the paperwork came through it was the end of April 2006 before we drew down the mortgage. The fixed rate period was to run from Feb 2006 to Feb 2008 and so we will only get that fixed rate until the end of Feb 2008, even though that it not two full years since we drew down the mortgage.
I can only quess that something like this applies to the OP. Go back and look at your copies of the mortgage details and it should give you the info. I still reckon you will have saved a substantial amount over the period of the fixed rate.
 
Marg said:
When mortgage rates started rising in 2005 some of the banks were offering certain rates for certain fixed periods of time.
To give you a real example we fixed with NIB for two years at 3.29%. That was the rate we were offered when we applied in Feb 2006, but by the time all the paperwork came through it was the end of April 2006 before we drew down the mortgage. The fixed rate period was to run from Feb 2006 to Feb 2008 and so we will only get that fixed rate until the end of Feb 2008, even though that it not two full years since we drew down the mortgage.
I can only quess that something like this applies to the OP. Go back and look at your copies of the mortgage details and it should give you the info. I still reckon you will have saved a substantial amount over the period of the fixed rate.
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So its from the time they make you the offer and not the time you draw down the mortgage that the 2 years starts?
Its kinda silly as there's a few variables that can affect how quick you can get into your house, and by that I mean the solicitor I used seemed kinda slow. For example he had told me on a few accasions he had sent paperwork to the bank when infact he had not as I called the bank directly and they informed me that no paperwork had arrived.
 
"and by that I mean the solicitor I used seemed kinda slow. For example he had told me on a few accasions he had sent paperwork to the bank when infact he had not as I called the bank directly and they informed me that no paperwork had arrived."

I am a solicitor. I regularly send paperwork to banks. They regularly say they did not get it. My clients routinely prefer to accept the word of the bank rather than my word. Banks generally find the paperwork when you send them details of who signed for them.

mf
 
BountyHunter said:
So its from the time they make you the offer and not the time you draw down the mortgage that the 2 years starts?
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Maybe - you really need to check the terms and conditions of your specific loan agreement.
Its kinda silly as there's a few variables that can affect how quick you can get into your house, and by that I mean the solicitor I used seemed kinda slow. For example he had told me on a few accasions he had sent paperwork to the bank when infact he had not as I called the bank directly and they informed me that no paperwork had arrived.
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If you have a gripe with your solicitor then surely that's a totally separate issue? Have you raised these issues with him?
 
Some lenders have a specific end date for fixed rate mortgages (from memory ICS/BOI and IIB) so it could have been marketed in 2005 as a two year fixed rate with a end date of 30/10/07. If you didn't draw down until March 2006 the same end date would still apply. It should be clear on your loan offer.

Sarah W

www.mortgagesoverseas.com
 
mf1 said:
"and by that I mean the solicitor I used seemed kinda slow. For example he had told me on a few accasions he had sent paperwork to the bank when infact he had not as I called the bank directly and they informed me that no paperwork had arrived."

I am a solicitor. I regularly send paperwork to banks. They regularly say they did not get it. My clients routinely prefer to accept the word of the bank rather than my word. Banks generally find the paperwork when you send them details of who signed for them.

mf
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Well that may well be true mf1, in my case anyway it seemed that he was taking quite a while. I knew my mortgage broker who in turn know the person in the bank and maybe I was naive to think they were not telling what exactly was going on.

Clubman:
I never said I has a gripe with my solicitor, merely stating that it seemed to take a while to get paperwork sorted which in turn delayed me getting into my house. While all this is going on the clock on my 2 year fixed rate mortgage is ticking apparently.

I'm stating my own experiences with my first house purchase, I'm not looking for an argument or pointing the finger at anybody just looking for advise/input into what is for me a very important issue.
 
BountyHunter said:
Clubman:
I never said I has a gripe with my solicitor, merely stating that it seemed to take a while to get paperwork sorted which in turn delayed me getting into my house. While all this is going on the clock on my 2 year fixed rate mortgage is ticking apparently.
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Key word here is "apparently" - until you check the terms & conditions of your loan agreement we simply don't know.
I'm stating my own experiences with my first house purchase, I'm not looking for an argument or pointing the finger at anybody just looking for advise/input into what is for me a very important issue.
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I just didn't understand where the seeming non sequitur about your solicitor delaying with the paperwork came from and what it had to do with the substantive issue here.
 
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