Friday, 27 September 2013

Frugal Friday...

Not much time for frugality this week, as I'm actively being frugal by working on a Friday! Clients of mine have a staff shortage in their office today, and as a result asked me very nicely if I could consider doing an additional day for them - well of course I could! It does seem odd, these days, to be working on what is usually my day off, but that's an extra days earnings that can whizz off to the mortgage overpayments in due course.

Talking of mortgage overpayments - if you have an old Northern Rock Mortgage that has now been taken over by Virgin Money - beware. Without fail, whenever I have called them previously to make a lump-sum overpayment, I've always been asked whether I want to use the extra money to reduce the future monthly payments, or to reduce the term. Naturally we've always confirmed that we want to reduce the term, as that is after all the whole point of throwing the extra money at the thing! Last time though, after making an extra payment, we received a letter confirming that our "new" monthly payment was £xxx - over £100 per month LESS than what we're meant to be paying. Now, fellow NR mortgage people will know that their products mostly have an overpayment limit of 10% of the outstsanding balance in each financial year - so by reducing the monthly payment, Virgin have effectively put us into a position where, this year, we will now go over our allowance, and will get charged for the privilege!  When I questioned this with them on the phone, I was told that it was a "mistake" that this had never been done in the past - presumably their question asked numerous times before about reducing the term was also a "mistake"?!

It won't surprise any of you in the least to know that we intend to take this further with them - MrEH is composing a letter as we speak - but I thought it worthy of mention as Virgin seem to have picked up a good amount of mortgage business over the past 12 months or so, and I can imagine a large number of people being affected. Had we not made that last lump-sum overpayment, we would never have known that we were set to go over our limits this year, so how many others must there be out there quietly making a standard monthly OP who have no idea that their provider is taking it upon themselves to change their terms?



Scarlet said...

Ooh, that is very sneaky. We have a limit that we can overpay by , but as our overpayments are quite small we never get close to it.It's all moving in the right direction though and we now own 70%, which isn't bad considering we've only ever had a low income, and had to increase the mortgage considerably to buy this house.

lonestarsky said...

Wow, that's really dodgy. Just goes to show you can never be too careful. It actually really annoys me that they set a limit anyway. I know they need to make money and that homeowners are tied into an agreement, but it seems ridiculous that there's a limit on how much someone can pay towards money they owe.

Robyn said...

Scarlet - it amazed us at the start how even the tiniest overpayment could make such a big difference over time!
Lonestarsky - the most ridiculous thing of all was that when we were still with the government-owned Northern Rock they imposed the same restrictions! You'd think they would have wanted people to throw all the money they could at them!

saving for travel said...

Good news about the extra work.

As for V and the rest-i wouldn't trust them as far as I could throw them.

Sft x

Robyn said...

No, quite - we never have, which is why the letter they sent us immediately raised questions!