Questions of cash: It pays to keep track of your mortgage payments
Saturday 30 May 2009
Q: We moved house in July last year. Nationwide redeemed our existing tracker mortgage against our wishes.
With difficulty, we had the sum outstanding at redemption 'ported' back onto the same tracker product. Because the original product was redeemed after five years and a new product issued for the remaining 19 and a bit years, we calculate that we will pay extra interest over a 25-year period, as more interest is paid in the early years than the later ones. The Financial Ombudsman Service tells us that as we have a repayment mortgage we should not pay more interest as a result of having the mortgage redeemed and reinstated. But in July 2008 – before the problem arose – the interest rate was 5.29 per cent and the monthly repayment £647.83. In December, the interest rate had fallen to 3.29 per cent and the calculated repayment was £565.77 per month. A 2 per cent interest rate cut should have resulted in monthly repayments falling to about £500 per month. MW, Rawtenstall.
A: Congratulations on keeping a close eye on the mortgage charge calculations. Your assessment is correct. In a statement, Nationwide says: "In line with our usual practice, an early repayment charge and redemption fee were applied on redemption and then refunded once the product was set up again on the new property. Unfortunately there was a delay in porting the tracker product and this was not completed until 8 January 2009. As a result of the delay, [the readers] were overcharged by £539.23 in interest on the tracker part of their mortgage from 31 July 2008 to 7 January 2009. An interest adjustment has now been made to [the] mortgage account and the balance has been reduced by this amount. Furthermore, we have extended the expiry date of [the] tracker rate to 31 August 2009, from March 2009. We calculate the interest lost as a result of a) the delay in refunding the early repayment charge and redemption expenses, and b) paying a higher rate of interest on the tracker part of the mortgage, to be £40.24 and £9.51 respectively. [The readers] have not been financially disadvantaged as a result of redeeming their existing mortgage, which was part way through the initial term of 25 years, and re-setting the new mortgage with a term of 19 years and 7 months." But, adds Nationwide, it has not provided you "with the level of service we would have liked" and it apologises "for the inconvenience and frustration that this has caused". It is offering you compensation of £200.
Q: I bought kitchen units from a local independent company in 2006 – a one-woman outfit who imports products from Portugal. This was completed in December 2006. The last invoice was given to us in December 2006, which I paid. It was clearly understood by both of us that this was the final payment. In March this year I had a letter from her explaining that her accountant had calculated that VAT on the purchase of £493 had not been paid. She admits that she made a mistake in her calculations and failed to include this in her invoice. Do I have to pay this? I had the money to pay it at the time, but our financial circumstances have since changed: my partner has lost his job and my income has fallen badly. We did not realise we had not paid everything. LL, Leighton Buzzard.
A: A supplier has six years (five years in Scotland) in which to invoice for goods supplied – and that includes invoicing to correct an undercharge. The situation might have been different if the bill had stated that this was a 'full and final invoice', but it did not. Nor are you certain that the supplier stated clearly, verbally, that this was a 'final invoice'. This is a genuine error made by the supplier, that you were unaware of. Susan Marks of Citizens Advice says there was "a mistake... which both parties should have realised". She adds: "As it is within the legal time limit, the outstanding amount remains outstanding in order for the contract to be fulfilled on the part of the purchaser. It's inherent when you make a contract that you are going to pay the price agreed, in the same way that you don't expect a trader to come back with a higher price. The trader has been open and honest about the mistake and made a reasonable request." You should now explain to the supplier that your circumstances have changed and that you are not in a position to make an immediate payment in full. You should instead offer staged payments at a rate you can afford. Given the mistake made by the supplier in not billing you properly at the time, she should be accommodating in accepting staged payments. We offered to contact the supplier on your behalf, but you decided – probably correctly – that a friendly approach from yourself would be better.
Q: My wife and I had a 25-year with-profits endowment mortgage with Norwich Union that matured in July last year. I have read that there is a possibility of a windfall for current policyholders. I also understand that this surplus was postponed last year. Do we have a claim on this windfall? SH, Newcastle-upon-Tyne.
A: No. Your funds were held in the Norwich Union Life and Pensions (NULAP) fund. Only investments in specified funds are eligible for the 'reattribution offer'. These are those held within the CGNU Life With-Profits Fund and the Commercial Union Life Assurance Company (CULAC) With-Profits Fund, including the Norwich Union Life (RBS) Ltd (NUL RBS) and Norwich Union International (NUIL) policies. To be eligible, policies must have been in force on 21 November 2006 and still be in force on the day reattribution occurs, which is not likely to be before late this year at the earliest. All eligible policyholders will be contacted in the near future inviting them to vote on whether they wish to receive a 'reattribution payment'.
Questions of Cash cannot give individual advice. But if you have a financial dilemma, we'll do our best to help. Please email us at: firstname.lastname@example.org
Independent Partners: Get fee-free expert mortgage advice and find the right mortgage deal for you.
Buyers beware of new-build home headaches
Women born in 1950s facing severe financial hardship over pensions could have fates changed by Ros Altmann - should she choose to help
Five Questions On: GB Energy's new tariff
Simon Read: You're guilty until proven innocent when HMRC sends in the tax credit detectives
Money roundup video: Warning for mortgage borrowers and Premium Bonds boost
- 1 'Cheeky' Nando's under fire for apparently coming onto a customer on Twitter
- 2 Saudi Arabia mosque bombing: Two volunteer security guards hailed as heroes for stopping Isis suicide bomber reaching worshippers
- 3 Playboy model April Summers speaks out about being a victim of revenge porn
- 4 There is something wrong but very right about this Bible illustration
- 5 iPhone 'effective power' text: how to be safe from iOS bug that lets people crash your phone
EU referendum: David Cameron's rules are a 'democratic disgrace', says French-born Scottish politician set to be denied a vote
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
A nation of inequality: How the UK is failing to feed its most vulnerable people
Australian man punched in the face for defending Muslim women from abuse on train
David Starkey 'tells Amal Clooney to shut up and stop over-promoting human rights'
iJobs Money & Business
£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...
£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...
£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...
Day In a Page
This four-bedroom Edwardian home offers a combination of original features and contemporary design after a renovation by the current owners.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This four-bedroom home offers a vaulted ceiling in a breakfast room that's ideal for summer entertaining with doors that open to the patio and garden.
On the market for the first time in more than 50 years, this six-bedroom home is a project with vast potential - spread over three floors of living space.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Surrounded by rolling countryside, this four-bedroom barn conversion comes with a self-contained, one-bedroom annexe that could serve as an office or a holiday let.
Located near Harrogate town centre, this five-bedroom Victorian terrace is arranged over three storeys while a current study serves as an optional sixth bedroom.
A ground-floor flat in a country house, located a mile from Sway; this two-bedroom home would make an ideal weekend retreat on the edge of the New Forest.
On a popular residential lane in Caterham on the Hill, this four-bedroom family home offers a secluded garden and a convenient location for local schools and public transport.
Just a short walk from Westerham green, this three-bedroom cottage has a light kitchen with exposed brickwork and double doors that lead to a south-facing garden.
In a prime spot opposite the River Thames, this one-bedroom flat has an 18sq ft reception room with glass doors that open out to a private terrace.
Set in the hills above Llanwrda Village, west Wales, this 18th-century three-bedroom farmhouse has holiday-let potential from a separate barn conversion and annexe.
This charming end-of-terrace townhouse is arranged over three floors, with two double bedrooms and a private courtyard garden located at the rear of the property.
Located in the University area, this semi-detached five-bedroom home is arranged over three floors - there's even a rear garden and off-road parking too.
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.
In a row of eight detached Georgian residences, this five-bedroom home offers views of The Sound, Mount Edgcumbe and Cornwall from its impressive veranda and full-length balcony.
If you love cooking for friends this two-bedroom flat - complete with views of the iconic Battersea Power Station and an open-plan kitchen/dining area - will go down a treat.
Located above Grasmere village, this five-bedroom home is arranged over three floors and offers countryside views across Grasmere Lake towards Silver Howe.
Surrounded by the Western fells, this five-bedroom Georgian home retains many original features including panel-plastered ceilings, sash windows and fireplaces.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B, subject to change of use permissions.
A former period coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, office, kennels and an outbuilding that's currently used as a gym.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool