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


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?



TB



Stevenage

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?

BF

South London

***

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.

www.moneyagonyaunt.com

Do you need a financial makeover?

Write to Julian Knight at The Independent on Sunday, 2 Derry Street, London W8 5HF; j.knight@independent.co.uk

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

PROMOTED VIDEO
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmReview: A week late, Secret Cinema arrives as interactive screening goes Back to the Future
Travel
travel
Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
artCultural relations between Sydney and Melbourne soured by row over milk crate art instillation
Arts and Entertainment
Adèle Exarchopoulos and Léa Seydoux play teeneage lovers in the French erotic drama 'Blue Is The Warmest Colour' - The survey found four times as many women admitting to same-sex experiences than 20 years ago
filmBlue Is The Warmest Colour, Bojack Horseman and Hobbit on the way
Arts and Entertainment
Preparations begin for Edinburgh Festival 2014
Edinburgh festivalAll the best shows to see at Edinburgh this year
News
Two giraffes pictured on Garsfontein Road, Centurion, South Africa.
i100
News
Kenny Ireland, pictured in 2010.
peopleBenidorm, actor was just 68
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
News
i100
Arts and Entertainment
arts + ents
News
Morrissey pictured in 2013
people
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Regulatory Reporting-MI-Bank-Cardiff-£300/day

    £200 - £500 per day + competitive: Orgtel: I am currently working on a large p...

    Trainee Recruitment Consultant - Birmingham - Real Staffing

    £18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

    Training Programme Manager (Learning and Development)-London

    £28000 - £32000 per annum + benefits: Ashdown Group: Training Programme Manage...

    1st Line Support Technician / Application Support

    £20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

    Day In a Page

    Dress the Gaza situation up all you like, but the truth hurts

    Robert Fisk on Gaza conflict

    Dress the situation up all you like, but the truth hurts
    Save the tiger: Tiger, tiger burning less brightly as numbers plummet

    Tiger, tiger burning less brightly

    When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
    5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

    In grandfather's footsteps

    5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
    Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

    Martha Stewart has flying robot

    The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
    Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

    Do women cyclists need 'pootling lanes'?

    Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
    A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

    A tale of two presidents

    George W Bush downs his paintbrush to pen father’s life story
    Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

    The dining car makes a comeback

    Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
    Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

    Gallery rage

    How are institutions tackling the discomfort of overcrowding this summer?
    Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

    Eye on the prize

    Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
    Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

    Women's rugby

    Tamara Taylor adds fuel to the ire in quest to land World Cup
    Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

    The day America’s love of backyard tigers led to a horrific bloodbath

    With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
    Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

    How Samuel Beckett became a French Resistance spy

    As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
    We will remember them: relatives still honour those who fought in the Great War

    We will remember them

    Relatives still honour those who fought in the Great War
    Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

    Kodak's last-ditch bid to keep celluloid alive

    Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
    Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

    Acting in video games gets a makeover

    David Crookes meets two of the genre's most popular voices