Consumer rights: What to do with a house-sale windfall
To save the cash or pay off the mortgage is the £147,000 question... Does court offer hope for scammed consumer... How to get help when debts close in
Sunday 25 October 2009
We have £147,000 equity from the sale of a flat. We currently have a variable rate (2.5 per cent) mortgage with Intelligent Finance for £240,000. We intend to buy another property in about nine to 12 months. In the meantime, are we better to pay off some of our mortgage or to invest money in a bank account?
Independent Financial Adviser Simon Hodge says, "The downside of paying off part of your mortgage is the question of being able to release your capital again when you're ready to buy. Banks aren't overly keen to do that at the moment. The savings account option would be more flexible and allow you to have money available quickly if you need it or for a large deposit to make the borrowing easier and generally on better terms." You can check out the best-buy savings accounts through websites such as moneysupermarket.com or moneyfacts.co.uk. Remember, you can pay up to £3,600 (£5,100 if you're over 50) into a cash individual savings account in this tax year and interest will be paid free of tax as a result.
Mr Hodge also suggests "offsetting" your capital against your mortgage rather than paying it off. Your savings are held in your account beside the mortgage and the interest paid on them pays interest on the loan. Check that your Intelligent Finance product will allow you to "offset" your equity against your mortgage. That would, in effect, save you the interest payments on £147,000 of your mortgage. If you kept making your existing monthly repayments, this would reduce your existing mortgage and you'd still have the capital available for when you're ready to buy your new property. The interest rates at the moment are relatively low and the 2.5 per cent you're paying is reasonable. If you can't use offset, there are some accounts which will pay up to 3 per cent AER which is approximately comparable to the interest you're paying on your mortgage so, in effect, will be "interest neutral" by the end of the term.
In the 2 August issue you advised me when I'd had about £20,000 taken from my bank account through an email phishing fraud. After a lot of correspondence with the bank – NatWest – the case went to the Ombudsman who decided that I was partly to blame because I'd responded to a request for my personal details and password and I should have known not to do this. The bank paid me a small amount of money back and I eventually had to accept that. Now I've read in the newspapers that I wasn't the only victim. Another 138 people were caught out using the same bank's website and some individuals are currently being prosecuted. Does this change things? Can I make another claim from the bank?
Name and address withheld
I remember being frustrated about your case but unfortunately this latest development changes nothing as far as you are concerned. The court proceedings don't in any way affect the liability of NatWest. The proceedings are against the alleged fraudsters, not legal proceedings against the bank. In addition, your acceptance of the Ombudsman's award did entail signing a "full and final settlement" clause which made it legally binding on you, so nothing has changed as far as NatWest's liability is concerned. Even if the defendants are found guilty, this wouldn't affect the liability of the bank. You could lodge a claim against anyone found guilty of the phishing fraud.
However, John Eaton, the financial services director at Leeds solicitors Lupton Fawcett, thinks this will be a difficult course of action. "The problem is that, although you would have a pretty solid case in law if you could prove you had been a victim, that doesn't mean that you could recover the money which had been stolen from your account. If you did feel you wanted to give this avenue a try, the Southwark Crown Court prosecution department might be able to confirm the defendants' financial situations – but it's a pretty long shot. Before you try to extract blood from a stone, you need to know that the stone does have some blood in it."
I'm a few months behind with my mortgage and can't see how things are going to improve. There's no overtime at the minute and I depended on that to pay the mortgage, so the situation is likely to get worse rather than better. I work the usual office hours so I can't get away to talk to anyone and I don't want to alert the building society to my situation. Can you help?
You must talk to someone or the situation will certainly get worse. Your lender will already be aware that you are in arrears and lenders tend to get more difficult if they don't know why. They will do all they can to help if they know the score. If you'd rather talk to an adviser first, make an appointment in your lunch hour. Some Citizens Advice Bureaux have extended opening hours so they can see people who otherwise can't get to them and there are telephone-based debt advice services. National Debtline has just taken on almost 50 more advisers and is open on Saturday mornings. They can guide you through your debt problems or give you all the information you need to sort them out yourself. Call them on 0808 808 4000 or go to www.nationaldebtline.co.uk. CCCS has a free phone service on 0800 138 1111 or www.cccs.co.uk
All three organisations are charities and advice is free. The Building Societies Association has just published a report showing that the sooner people contact them the more likely it is things will get sorted out.
Do you need a financial makeover?
Write to Julian Knight at The Independent on Sunday, 2 Derry Street, London W8 5HF; firstname.lastname@example.org
Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk
- 1 Game of Thrones season 6: Jon Snow theorists believe Ned Stark's son may have a twin sister
- 2 Artist takes LSD, draws herself over different stages of the 9-hour trip to show its effects
- 3 Miley Cyrus address Robin Thicke VMA controversy: ‘He wanted me as naked as possible, but I got the heat because I’m a woman’
- 4 iPhone 6s camera: features to include 4K video camera and flash for selfies
- 5 A pint of water every day is the key to losing weight, scientists say
Dresden riots: Protesters in Germany attack refugee buses shouting 'foreigners out'
France train shooting: US soldiers speak of the moment they stopped gunman and 'beat him until he was unconscious'
Labour leadership: Jeremy Corbyn accused of 'deluding' young supporters with 'claptrap'
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...
Day In a Page
In a sandbanks location, moments from the beach, this three-bedroom apartment has a large open-plan living area and a south-west facing balcony.
This four-bedroom home has an annexe accessed from the side of the house, with potential for improvement and conversion subject to the necessary permissions.
In the heart of the hamlet of Wardley, this five-bedroom period home offers countryside views and a stylish interior, with original features and open fireplaces.
Offering countryside views and landscaped gardens, this three-bedroom Grade II-listed lodge has a spacious conservatory and a large cellar that could serve as a workshop.
Set in approximately 1.5 acres, this four-bedroom home comes with a second, detached property that's currently used as an annexe.
In the hamlet of Newchurch, this former parish church is now a four-bedroom home complete with clock tower and eyrie.
Offering scenic views from a large balcony and sun terrace, this four-bedroom home has a wraparound garden and a heated swimming pool.
Offering views across the Humber and East Yorkshire Wolds from a glass panelled balcony, this four-bedroom barn-style home befits a life of leisure.
This four-bedroom home offers versatile accommodation with annexe potential; features include a hot tub, sauna and Norwegian BBQ hut.
Well-located for schools, colleges and the town centre, this contemporary thatched cottage offers flexible living space with six bedrooms.
Built in 1907, this four-bedroom Edwardian period home has been refurbished by the current owners, retaining many original period features.
Surrounded by landscaped gardens, this five-bedroom home offers living space across three floors.
This lovely country home in Burnham Market is currently run as a popular holiday cottage, with five en suite bedrooms and colourful gardens.
This three-bedroom 17th-century former village bakery is just a few miles from the East Sussex coast.
Set on a landscaped plot, this light and airy four-bedroom home comes with a log burner in the lounge, a fitted kitchen and an open-plan ground-floor layout.
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.
Built on a former chapel site, this impressive four-bedroom home boasts balconies, stunning views and contemporary modern living.
This three-bedroom house is situated in a quiet mews and set over three floors. Features include glazed staircases and high ceilings.
A period townhouse set over four floors, this five-bedroom home was built in the 18th Century and retains many original features.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
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.
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 first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
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.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
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.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
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.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
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.
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 six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.
Spanning three storeys, this late-Victorian five-bedroom farmhouse is a spacious family home with a modern interior and B&B potential.
With an original church arch, this triplex one-bedroom church conversion has a light, spacious, feel and comes with a secure off-street parking space.