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jp944

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  1. We took a remortgage with Northern rock which included a cashback deal and a 5 year tie in period which didnt concern us as at that time we thought we would be in our house for life. Last year our circumstancies changed and we began considering moving/building our own house, I made a few enquiries with Northern Rock who told me I would have to pay the ERC but if we took out another mortgage with Northern Rock (within 3 months I think they said) we would be refunded 1/2 the ERC. The ERC was 7% of the outstanding balance and this reduces by 0.5% a year for 5 years. We didnt think this was a bad deal and have been looking around for suitable land. Having found a plot of land and made further enquiries I am told that they wont refund any ERC as this would be unfair to give to one customer and not another (but they must have done this in the past if what I was told is correct). We now need to raise a large sum of money to make a cash offer on the land, the only way to raise the amount we need quickly is to remortgage with Northern Rock onto thier Together mortgage which allows us to borrow 95% of the value of our house + an additional £30K as an unsecured loan at the same variable rate as the mortgage (incidently a lower rate than we currently pay). If we go ahead they want to charge us £4009 ERC (6% of balance) + £1000 refund of help with costs + £295 review fee + £299 Further lending fee, total £5603. The only good thing about this is the new mortgage will not have any ERC and our next move (if our bid on the land is succesfull) will be to sell the house and repay this mortgage in full, this would then just incur the £250 discharge of mortgage fee which I have read may be an unfair amount anyway and questionable. My question is can I challenge the orgional advice of receiving 1/2 ERC back if I take out another mortgage with Northern Rock and the additional charges totalling £694 seem excessive to me for effectively raising additional capital against a house they already have an interest in, so do I have a case to question these. At the moment we feel our only option is to go with this to raise capital quickly, and whilst £5600 is a lot of money its not worth missing out on the opportunity we have in front of us. We are considering going down this route and taking our chances on challenging any of the charges, would love to hear your opinion on whether you think we have a case on any of the charges and how we should go about it.
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